SRFM 8-K
Surf Air Mobility Inc. (SRFM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement
Omnibus Amendment and Exchange Agreement
On June 30, 2026, Surf Air Mobility Inc. (the “Company”) entered into an Omnibus Amendment and Exchange Agreement (the “Exchange Agreement”) with one of its current lenders and an institutional investor, pursuant to which the Company and such lender agreed to exchange the existing Senior Secured Convertible Note due 2028, with an initial aggregate principal amount of $74 million issued on November 12, 2025 (the “Prior Note”).
Pursuant to the Exchange Agreement, the Prior Note, with a current outstanding principal balance of $46,857,142.89 will be exchanged for (i) a new Senior Secured Convertible Note due 2027, with an aggregate principal amount of $16,857,142.89 (the “New Convertible Note”) and (ii) a new Senior Secured Term Note due 2028, with an aggregate principal amount of $30,000,000 (the “New Term Note” and collectively, the "New Notes").
The New Term Note will accrue interest at a rate of 12% per annum beginning January 1, 2027. The New Term Note will mature on January 1, 2028, unless earlier repaid.
The New Convertible Note will mature on July 1, 2027, unless earlier converted, redeemed or repurchased. Repayment of any principal amount remaining outstanding at maturity will be required to be made at 110% of such principal amount. The New Convertible Note may be converted at an initial conversion rate of 896.0573 shares of Common Stock per $1,000 principal amount of Note (equivalent to an initial conversion price of approximately $1.116 per share of Common Stock), representing an aggregate of 16,186,615 shares of Common Stock issuable upon the conversion of the New Convertible Note. The conversion rate is subject to adjustment if certain events occur.
The holder will have the option to require the Company to partially redeem the New Convertible Note on the first calendar day of each month beginning on August 1, 2026 in cash or in shares of common stock (a “Partial Redemption Payment”). For Partial Redemption Payments made in shares of common stock, the Company may make such payment in an amount equal to the greater of (i) 6% of the aggregate daily volume of the common stock for all trading days during the relevant determination period, subject to a cap of $3,000,000 and (ii) $2,000,000. For a Partial Redemption Payment payable in cash, such payment amount shall be $2,000,000. Any such partial redemption payment (whether in cash or in shares) shall reduce the principal amount by such paid amount divided by one hundred ten percent (110%).
In the event of a fundamental change, as described in the New Notes and generally including (i) any person or group becoming the beneficial owner of more than 50% of the voting power represented by the outstanding Common Stock, (ii) the sale, transfer or other disposition of all or substantially all of the Company’s properties or assets and (iii) any transaction or series of related transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation or otherwise) all of the common stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities, cash or other property, the holder of the Note will have the right to require the Company to repurchase the New Notes (or a portion thereof) for a cash purchase price equal to the Fundamental Change Repurchase Price (as defined in each of the New Convertible Note and the New Term Note).
The New Notes contain customary events of defaults, consistent with the Prior Note.
The New Notes are subject to comprehensive negative and affirmative covenants, including, inter alia, restrictions on its ability to incur indebtedness, create liens, make investments, declare or pay cash dividends or repurchase equity, and transfer or sell material assets, in each case subject to certain enumerated exceptions. The Company must also maintain a minimum liquidity of equal to: (1) at all times, $5,000,000; and (2) at all times during at least forty-five (45) calendar days out of any sixty (60) consecutive calendar day period, $8,000,000. in unrestricted cash and cash equivalents in controlled accounts. In addition, the Company must maintain a required reserve of 60,000,000 shares of authorized and unissued common stock. The Company must also maintain at least $30,000,000 in available capacity under either an equity line of credit or an “at-the-market” offering within the meaning of Rule 415(a)(4) of the Securities Act pursuant to which the Company may issue and sell shares of common stock from time to time. Additional affirmative covenants require the Company to maintain its business within existing lines, preserve its corporate existence, properties and intellectual property rights, maintain adequate insurance and ensure affiliate transactions are on arm’s length terms.
Each of the New Convertible Note and the New Term Note will be senior secured obligations of the Company, guaranteed by substantially all of the Company’s subsidiaries, and secured by assets of the Company and certain of the Company’s subsidiaries, and the Company’s obligations thereunder will be subject to a security interest on the assets of the Company and the subsidiary guarantors, subject to certain exceptions.
In addition, pursuant to the Exchange Agreement, the Company voluntarily reduced the exercise price of the warrants to purchase shares of common stock issued to an institutional investor on November 10, 2025, from $3.32 to $1.12 per share.
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The New Notes, and, in the case of the New Convertible Note, the shares of common stock issuable upon the conversion of the New Convertible Note are being offered and sold in reliance on the private placement exemption from registration provided by Section 4(a)(2), as well as Section 3(a)(9), of the Securities Act of 1933, as amended (the “Securities Act”).
The foregoing descriptions of the Exchange Agreement, the New Term Note and the New Convertible Note are qualified in their entirety by reference to the full text of the forms of Exchange Agreement, the New Term Note and the New Convertible Note, copies of which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
Asset-Backed Financing Transaction
On June 30, 2026, the Company, an institutional collateral agent and certain purchaser parties thereto (the “Purchasers”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the Purchasers purchased certain Senior Secured Debentures, with an aggregate face amount of $21,600,000 (the “Secured Debentures”), issued by Southern Airways Pacific, LLC and Southern Airways Express, LLC, each a subsidiary of the Company (individually and collectively, as the context requires, the “Subsidiaries”).
The initial Secured Debenture with an aggregate principal amount of approximately $7,000,000 was issued on June 30, 2026 and was used to finance a portion of the purchase price of certain Cessna Grand Caravan aircraft, and the remaining balance of the Secured Debentures in an amount equal to approximately $14,000,000 will be issued upon satisfaction of certain closing conditions and will be used for general working capital. The Secured Debenture is secured by the purchased aircraft and certain other aircraft assets of the Subsidiaries.
The Secured Debentures shall accrue interest at 13.5% per annum payable monthly in arrears in cash on the last day of each month, mature on June 30, 2031, be issued with an original issue discount of $600,000, provide for monthly amortization payments of $220,000 beginning on June 30, 2027 and on the last day of each month thereafter and permit prepayment at par without any prepayment premium, repayment premium, make-whole or penalty.
In addition, the Company issued the Purchasers tranche A warrants to purchase an aggregate of 710,294 shares of common stock at an exercise price of $1.2555 and tranche B warrants to purchase an aggregate of 617,647 shares of common stock at an exercise price of $1.6740. Each of the tranche A warrants and tranche B warrants (collectively, the “Warrants”) are immediately exercisable and have a term of five years. In addition, on June 30, 2026, the Company and the Purchasers also entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to register the shares of common stock issuable upon the exercise of the tranche A warrants and the tranche B warrants within 45 days following the date of the execution of the Registration Rights Agreement.
The foregoing descriptions of the Purchase Agreement, the Secured Debentures, the Warrants and the Registration Rights Agreement are qualified in their entirety by reference to the full text of the forms of the Purchase Agreement, the Secured Debentures, Warrants and the Registration Rights Agreement copies of which are filed as Exhibits 10.4, 10.5, 10.6 and 10.7, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
The Company notes that the representations, warranties and covenants made by the Company and its subsidiaries in any agreement that is filed as an exhibit to any document that is filed herewith were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to or in favor of any stockholder or potential stockholder of the Company or its subsidiaries other than the parties thereto. In addition, the assertions embodied in any representations, warranties and covenants contained in such agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to security holders generally. Moreover, such representations, warranties or covenants were accurate only as of the date when made, except where expressly stated otherwise. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of the Company’s or its subsidiaries’ affairs at any time.
The Warrants and the shares of common stock issuable upon the exercise of the Warrants are being offered and sold in reliance on the private placement exemption from registration provided by Section 4(a)(2) of the Securities Act.
Letter of Credit and Reimbursement Agreement Amendment
In connection with the foregoing financing transactions of the Company, the Company is required to cause the issuance and delivery of an irrevocable standby letter of credit in an amount equal to $14,000,000 to backstop the Debentures (the “Debenture Letter of Credit”). In addition, the Company is required to cause an existing $30,000,000 letter of credit related to the Note to be amended to contain references to the New Convertible Note and the New Term Note (the “Note Letter of Credit” and, collectively, the “Letters of Credit”). The Debentures, New Convertible Note and New Term Note contain certain representations and warranties, covenants and events of default. Upon the occurrence of certain events of default, the holders of the Debentures, New Convertible Note and New Term Note would have the right to draw upon their respective Letters of Credit.
On June 30, 2026, the Company also entered into an amendment to the Company’s existing reimbursement agreement, dated as of such date (as amended, the “Reimbursement Agreement”), among the Company, the subsidiaries of the Company party thereto and Park Lane Investments LLC ("Park Lane"), to add the
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Debenture Letter of Credit to the scope of the Reimbursement Agreement and revise the references to the Note Letter of Credit. If either Letter of Credit is drawn upon, the Company will be required to reimburse Park Lane for the drawn amount and pay interest to Park Lane at 15.00% per annum on such drawn amounts (subject to increase in the event of default). The Company is separately obligated to pay a fee of 1.00% per annum to Park Lane on the outstanding principal amount of the backstop letter of credit. In the event the Company raises capital in certain equity offerings, a portion of the net cash proceeds from such equity offerings is required to be remitted to Park Lane to be held in trust in accordance with the Reimbursement Agreement. The obligations under the Reimbursement Agreement are guaranteed by certain of the Company’s subsidiaries, and subject to a security interest on assets of the Company and the subsidiary guarantors, subject to certain exceptions. The Reimbursement Agreement contains certain representations and warranties, covenants and events of default. As consideration for Park Lane’s commitment to provide credit support for the Debenture Letter of Credit, the Company has agreed, subject to the completion of certain conditions, to issue warrants to purchase up to 2,500,000 shares of Common Stock at an exercise price equal to the “Minimum Price” as determined under the rules of the New York Stock Exchange.
The foregoing description of the Reimbursement Agreement is qualified in its entirety by reference to the full text of the form of the Reimbursement Agreement, a copy of which is filed as Exhibit 10.8 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information disclosed in Item 1.01 of this Current Report on Form 8-K regarding the Exchange Agreement, Purchase Agreement, the New Term Note, the New Convertible Note, the Secured Debentures and the Warrants is incorporated herein by reference. The shares of common stock issuable upon conversion of the New Convertible Note and the exercise of the Warrants have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Item 7.01. Regulation FD Disclosure.
On July 1, 2026, the Company issued a press release announcing the offerings described in Item 1.01, a copy of which is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.
The information set forth in this Item 7.01 and Exhibit 99.1 is being furnished to and not filed with the Securities and Exchange Commission and shall not be deemed as incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act, except to the extent specifically provided in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number |
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Exhibit Title or Description |
10.1 |
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10.2 |
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10.3 |
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10.4 |
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10.5 |
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10.6 |
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10.7 |
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10.8 |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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SURF AIR MOBILITY INC. |
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Date: July 1, 2026 |
By: |
/s/ Deanna White |
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Name: |
Deanna White |
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Title: |
Chief Executive Officer |
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Exhibit 10.1
OMNIBUS AMENDMENT AND EXCHANGE AGREEMENT
This OMNIBUS AMENDMENT AND EXCHANGE AGREEMENT (this “Agreement”) is made and entered into as of June 30, 2026, by and between Surf Air Mobility Inc., a Delaware corporation (the “Company”), High Trail Special Situations LLC (the “Note Holder”), and HT Investments MA LLC (the “Warrant Holder,” and together with the Note Holder, each, a “Holder,” and collectively, the “Holders”). Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement (as defined below).
RECITALS
WHEREAS, the Company and the Holders are parties to that certain Securities Purchase Agreement, dated as of November 10, 2025, by and among the Company and the Holders, as amended from time to time (the “Securities Purchase Agreement”);
WHEREAS, pursuant to the Securities Purchase Agreement, on November 12, 2025, the Company issued to the applicable Holder: () pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), common stock purchase warrants (the “Warrants”) to purchase shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), and () pursuant to an exemption from registration requirements under the Securities Act, that certain Senior Secured Convertible Note due 2028, with an aggregate principal amount of $74 million (as () amended by that certain Amendment to Senior Secured Convertible Note Due 2028 and Security Agreement, dated as of April 24, 2026, between the Company, the other grantors party thereto and the Note Holder (“Amendment No. 1”), and that certain Amendment No. 2 to Senior Secured Convertible Note due 2028 and Security Agreement, dated as of June 2, 2026 (“Amendment No. 2”) and () modified by the Note Side Letters (as defined below), and as further amended, restated, amended and restated or otherwise modified to date, the “Existing Note”);
WHEREAS, the obligations of the Company under the Existing Note are: () secured by a first priority security interest to the Collateral Agent, as collateral agent for the Note Holder, in the Collateral, now owned and hereafter created or acquired, of the Company and its Subsidiaries, pursuant to the terms of that certain Security Agreement, dated as of November 12, 2025, between the Company, the other grantors party thereto, and the Note Holder (as amended by Amendment No. 1, Amendment No. 2, and as further amended, restated, amended and restated or otherwise modified to date, the “Security Agreement”) and () guaranteed by certain subsidiaries of the Company pursuant to the terms of that certain Subsidiary Guaranty Agreement, dated as of November 12, 2025, among the Company, the subsidiaries of the Company party thereto and the Note Holder (the “Subsidiary Guaranty”);
WHEREAS, the parties have previously entered into: () that certain Letter Agreement, dated March 12, 2026, between the Note Holder and the Company related to that certain Cash Sweep Notice, dated March 10, 2026, issued by the Note Holder to the Company (the “Initial Note Side Letter”) and () that certain Letter Agreement, dated May 18, 2026, between the Note Holder and the Company related to certain Company obligations under the Initial Note Side Letter
(the “Additional Note Side Letter”, and together with the Initial Note Side Letter, collectively, the “Note Side Letters”);
WHEREAS, the liens and payment priority of the obligations of the Company owed to the Note Holder and certain other creditors of the Company are subject to the terms of that certain Amended and Restated Subordination and Intercreditor Agreement dated as of November 12, 2025 among the Note Holder, the other creditors of the Company party thereto, the Company and the Subsidiary Guarantors (as defined therein) (the “Intercreditor Agreement”, together with the Securities Purchase Agreement, the Existing Note, the Warrants, the Security Agreement, the Subsidiary Guaranty, Amendment No. 1, Amendment No. 2, and the Note Side Letters, the “Existing Transaction Documents”);
WHEREAS, the Company and the Note Holder desire to exchange the Existing Note with a currently outstanding principal amount of $46,857,142.89 for: () a new Senior Secured Convertible Note due 2027, with an aggregate principal amount of $16,857,142.89, in the form attached hereto as Exhibit A (the “New Senior Note”, and the shares of Common Stock issuable upon conversion of such New Senior Note, the “New Note Shares”) and () a new Senior Secured Term Note due 2028, with an aggregate principal amount of $30 million, in the form attached hereto as Exhibit B (the “New Term Note”, and, together with the New Senior Note, the “New Notes”), which New Notes will be issued pursuant to an exemption from registration requirements under the Securities Act;
WHEREAS, the obligations of the Company under the New Notes will be secured by a first priority (subject to Permitted Liens) security interest to the Collateral Agent, as collateral agent for the Note Holder, in the Collateral, now owned and hereafter created or acquired, of the Company and its Subsidiaries, pursuant to the terms of that certain Amended and Restated Security Agreement, in the form attached hereto as Exhibit C (the “New Security Agreement”);
WHEREAS, the obligations of the Company under the New Notes will be guaranteed by certain of the subsidiaries of the Company, pursuant to the terms of that certain Amended and Restated Subsidiary Guaranty, in the form attached hereto as Exhibit D (the “New Subsidiary Guaranty”);
WHEREAS, the liens and payment priority of the obligations of the Company under the New Notes will be subject to the terms of that certain Second Amended and Restated Subordination and Intercreditor Agreement, in the form attached hereto as Exhibit E (the “New Intercreditor Agreement”, and together with the New Notes, this Agreement, the New Security Agreement, and the New Subsidiary Guaranty, the “New Transaction Documents”);
WHEREAS, pursuant to Section 3(g) of the Warrants, at any time, subject to the rules and regulations of the Trading Market (as defined in the Warrant) and applicable law, the Company may at any time during the term of the Warrants, subject to the prior written consent of the Warrant Holder, reduce the then current exercise price to any amount and for any period of time deemed appropriate by the board of directors of the Company;
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WHEREAS, in consideration of transactions contemplated hereunder, the Company and the Warrant Holder desire to amend the terms of the Warrants to reduce the exercise price of the Warrants to $1.12 per share;
WHEREAS, pursuant to Section 9(e) of the Securities Purchase Agreement, no provision of the Securities Purchase Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders; and
WHEREAS, in consideration of the transactions contemplated hereunder, the undersigned Holders constitute the Required Holders under the Securities Purchase Agreement and the Company and the Holders desire to amend the terms of the Securities Purchase Agreement as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the parties hereto, intending to be bound legally hereby, covenant and agree as follows:
AGREEMENT
() Exchange. Subject to the terms and conditions of this Agreement and pursuant to Section 3(a)(9) of the Securities Act, at the Closing (as defined below), the Existing Note shall automatically be, and be deemed to have been, cancelled and surrendered by the Note Holder to the Company in exchange for the following new notes issued by the Company and delivered to the Note Holder (the “Exchange”):
() the New Senior Note, in an aggregate principal amount of $16,857,142.89, in the form attached hereto as Exhibit A; and
() the New Term Note, in an aggregate principal amount of $30 million, in the form attached hereto as Exhibit B.
Upon the closing of the Exchange (the “Closing”), the obligations formerly evidenced by the Existing Note shall thereafter be evidenced by the New Notes.
() Cancellation of Existing Note. Upon the issuance of the New Notes to the Note Holder at the Closing, the Existing Note shall automatically be, and be deemed to have been, cancelled and shall be of no further force or effect, and the Note Holder shall have no further rights thereunder.
() Closing. The Closing shall take place on July 1, 2026, or on such other date as the Company and the Note Holder may mutually agree in writing, upon satisfaction or waiver, in each Holder’s sole discretion, of the conditions set forth in Section 7 hereof (the “Closing Date”).
() No Additional Consideration. The parties acknowledge and agree that no additional cash or other consideration, or any other consideration by the Note Holder that would not be consistent with the application of Section 3(a)(9) of the Securities Act to the issuance of the New
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Notes, shall be paid by either party in connection with the exchange of the Existing Note for the New Notes, and that the surrender and cancellation of the Existing Note constitutes adequate consideration for the issuance of the New Notes in exchange therefor.
() Holding Period. For the purposes of Rule 144 of the Securities Act, the Company acknowledges that () the holding period of the New Notes and the New Note Shares may be tacked by the Note Holder onto the holding period of the Existing Note and () the adjustment to the Warrants pursuant to Section 2 below shall have no effect on the holding period of the Warrants and the holding period of the Warrants will continue to tack back to the original issue date of the Warrants, and the Company agrees not to take a position contrary to this Section 1(e).
() The definition of the “Notes” contained in Recital B of the Securities Purchase Agreement shall be replaced entirely with the following:
“The “Notes” means, collectively: () the Company’s Senior Secured Convertible Note due 2027, in an aggregate principal amount of $16,857,142.89, issued to High Trail Special Situations LLC and () the Company’s Senior Secured Term Note due 2028, in an aggregate principal amount of $30 million, issued to High Trail Special Situations LLC, with each of (i) and (ii) constituting a “Note”.”
() The last sentence of Section 3(d) of the Securities Purchase Agreement shall be replaced entirely with the following:
“Transaction Documents” means, collectively, () this Agreement, () the Notes, () the Warrants, () the Lock-Up Agreements (as defined herein), () the Omnibus Amendment and Exchange Agreement, dated as of June 30, 2026, between the Company and the holders party thereto, () the collateral questionnaire(s), () the Security Documents, () the Amended and Restated Security Agreement, dated as of July 1, 2026, between the Company, the other grantors party thereto, and High Trail Special Situations LLC, as the secured party, () the Irrevocable Transfer Agent Instructions (as defined below), and () each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
() For the avoidance of doubt, all references to the “Notes” in the Securities Purchase Agreement, including, but not limited to, in connection with the Company’s covenants and obligations contained in Section 4 (Covenants) thereof shall mean and refer to the New Notes issued hereunder.
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() Organization and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to issue the New Notes and the New Note Shares.
() Authorization. The execution, delivery and performance by the Company of this Agreement and the issuance of the New Notes, and the New Note Shares upon conversion of the New Senior Note, have been duly authorized by all necessary corporate action on the part of the Company, and no further consent or authorization is required by the Company, its board of directors or its stockholders. When executed and delivered by the Company, the New Transaction Documents shall constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.
() Valid Issuance. The New Notes, when issued and delivered in accordance with this Agreement, will be duly and validly issued. The New Note Shares, when issued and paid for in accordance with the terms of the New Senior Note, will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of all liens, encumbrances and restrictions, other than restrictions on transfer under applicable securities laws and as set forth in the New Senior Note.
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() No Conflicts. The execution, delivery and performance of the New Transaction Documents and the consummation by the Company of the transactions contemplated thereby, and the issuance of the New Notes in exchange of the Existing Note, do not and will not () conflict with or result in a breach of any provision of the Company’s certificate of incorporation or bylaws, () violate in any material respect any law, rule, regulation, order, judgment or decree applicable to the Company (including federal and state securities laws and regulations), () result in a breach of, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both), with respect to any material agreement to which the Company is a party, or () result in the creation of any liens, claims, security interests, other encumbrances or defects upon any of the properties or assets of the Company except pursuant to the New Transaction Documents.
() Reservation of Shares. The Company has reserved a sufficient number of shares of Common Stock from its authorized and unissued shares to provide for the issuance in full of the New Note Shares upon conversion of the New Senior Note, without regard to any limitations on the conversion of the New Senior Note as set forth therein.
() Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the New Transaction Documents, except as otherwise has been obtained, including, without limitation, all consents, approvals and authorization required from the principal Trading Market on which the Common Stock is listed or quoted.
() No Registration Required. No registration under the Securities Act is required for the issuance of the New Notes in exchange of the Existing Note and, upon conversion of the New Senior Note, the issuance of the New Note Shares by the Company to the Note Holder as contemplated hereby.
() No Defaults. () The Company and each Subsidiary () are, on the date hereof immediately prior to giving effect to the Closing, in compliance with all covenants under the Existing Transaction Documents, and () will, on the date hereof immediately after giving effect to the Closing, be in compliance with all covenants under the New Transaction Documents, () on the date hereof immediately prior to giving effect to the Closing, no Default or Event of Default (each, as defined in the Existing Note) has occurred or is continuing, and () on the date hereof immediately after giving effect to the Closing, no Default or Event of Default (each, as defined in the New Notes) will have occurred or be continuing.
() Organization and Authority. Such Holder has the requisite power and authority to execute, deliver and perform its obligations under this Agreement.
() Ownership of Existing Note. The Note Holder is the legal and beneficial owner of the Existing Note, free and clear of any liens, claims, charges, security interests or other encumbrances.
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() Accredited Investor. Each Holder is financially capable of bearing the investment risks associated with investments of the kind contemplated by this Agreement and is an “accredited investor” as defined in Rule 501(a) of the Securities Act of 1933, as amended. Each Holder is familiar with the risks inherent in the acquisition and holding of investments of the kind contemplated by this Agreement, including without limitation the risk that the New Senior Note and New Term Note may have to be held indefinitely and may decline in value resulting in a loss of such Holder’s entire invested capital. Each Holder has been given the opportunity to ask questions of the Company and has received from the Company all information it has requested relating to this Agreement and the transaction contemplated hereby.
() Investment Intent. The Note Holder is acquiring the New Notes and, upon any conversion thereof, will acquire the New Note Shares, for its own account and not with a view to or for distributing or reselling such securities or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
() No Conflicts. The execution, delivery and performance of this Agreement by such Holder will not () violate any law, rule, regulation, order, judgment or decree applicable to such Holder, or () result in a breach of, or constitute a default under, any material agreement to which such Holder is a party.
() Conditions to the Holders’ Obligations. The obligations of each Holder to consummate the transactions contemplated under this Agreement at the Closing are subject to the satisfaction or waiver, in each Holder’s sole discretion, of the following conditions:
() the Company shall have delivered to the Note Holder the duly executed New Notes;
() the Company shall have delivered to the Note Holder the duly executed New Security Agreement;
() the Company and/or its Subsidiaries shall have delivered to the Note Holder the duly executed New Subsidiary Guaranty;
() the Company and the other parties thereto shall have delivered to the Note Holder the duly executed New Intercreditor Agreement;
() the Holders shall have received the opinion of Sullivan & Worcester LLP, the Company’s counsel, dated as of the Closing Date, in the form reasonably acceptable to the Holders;
() [Reserved];
() The Company shall have delivered to the Holders a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of
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such jurisdiction of formation as of a date within ten (10) days of the Closing Date, along with a bring-down letter certifying the good standing of the Company and each of its Subsidiaries as of the Closing Date;
() Each and every representation and warranty of the Company contained in Section 5 of this Agreement and Section 3 of the Securities Purchase Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by materiality or material adverse effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Holder shall have received a certificate, duly executed by the Chief Executive Officer or the Chief Financial Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Holder in the form reasonably acceptable to the Holder;
() The Common Stock () shall be designated for quotation or listed (as applicable) on the NYSE and () shall not have been suspended, as of the Closing Date, by the SEC or the NYSE from trading on the NYSE nor shall suspension by the SEC or the NYSE have been threatened, as of the Closing Date, either () in writing by the SEC or the NYSE or () by falling below the minimum maintenance requirements of the NYSE;
() The Company shall have obtained all governmental, regulatory or third party consents and approvals for the transactions contemplated hereunder, including, without limitation, the NYSE having raised no objection to any of the transactions contemplated by the New Transaction Documents, if any;
() No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the New Transaction Documents;
() Since the date of execution of the Securities Purchase Agreement, no event or series of events shall have occurred that would reasonably be expected to have a Material Adverse Effect;
() The Company shall have submitted a Supplemental Listing Application (“SLAP”) to the NYSE relating to the issuance of the New Senior Note and the New Note Shares as contemplated hereby, and, if required, the issuance of shares of Common Stock underlying the Warrants (the “Warrant Shares”), the NYSE shall have provided the written approval of such SLAP and the Company shall have otherwise not received any notice from the NYSE objecting to the listing of the New Note Shares and, if applicable, the Warrant Shares;
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() The Company shall have delivered, or caused to be delivered, to the Holders the results of recent lien, judgment and (if requested by the Holders) bankruptcy searches in each relevant jurisdiction with respect to the Company and its Subsidiaries, and such search results shall reveal no Liens on any of the Collateral (as such term is defined in the Security Agreement) except for Permitted Liens, Liens to be discharged on or prior to the Closing Date pursuant to documentation reasonably satisfactory to the Holders, or Liens in favor of the Holders;
() () the Company and each Subsidiary shall () immediately prior to giving effect to the Closing, be in compliance with all covenants under the Existing Transaction Documents, and () immediately after giving effect to the Closing, be in compliance with all covenants under the New Transaction Documents, () on the Closing Date, no Default or Event of Default (each, as defined in the Existing Note) shall have occurred or be continuing, and () no Default or Event of Default (each, as defined in the New Notes) shall result from the Closing;
() All costs, fees, expenses (including, without limitation, reasonable legal fees and expenses) contemplated hereby to be payable to the Holders shall have been paid and/or otherwise reimbursed to the extent due;
() The Company shall have delivered to the Note Holder a duly completed and executed collateral questionnaire dated no earlier than five (5) days prior to the Closing Date, in the form attached hereto as Exhibit F; and
() The Company shall have delivered to the Holders the Disclosure Schedules, which set forth, as of the date hereof, all information required to be disclosed therein pursuant to the Securities Purchase Agreement.
() Conditions to the Company’s Obligations. The obligations of the Company to consummate the transactions contemplated under this Agreement at the Closing are subject to the satisfaction or waiver of the following conditions:
() the Note Holder shall have delivered to the Company the duly executed New Security Agreement;
() the Note Holder shall have delivered to the Company the duly executed New Intercreditor Agreement; and
() the representations and warranties of each Holder contained in Section 6 of this Agreement and Section 2 of the Securities Purchase Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by materiality or material adverse effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date), and such Holder shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Holder at or prior to the Closing Date.
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() Additional Issuances of Securities. The Company agrees that for the period commencing on the date of this Agreement and ending on the date immediately following the thirtieth (30th) calendar day following the Closing Date (the “Restricted Period”), neither the Company nor any of its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or register, amend or supplement any outstanding registration statements or file any shelf registration statements, or any amendments or supplements thereto), or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of, any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the Securities Act), any Convertible Securities, any preferred stock or any purchase rights). Notwithstanding the foregoing, this Section 8(a) shall not apply during the Restricted Period in respect of () the issuance of restricted stock units, stock appreciation rights or restricted stock awards, Options or Convertible Securities issued under any Approved Stock Plan, so long as () the aggregate number of shares issued and issuable pursuant thereto does not exceed five percent (5%) of the Common Stock issued and outstanding immediately prior to the date hereof and () the exercise price of any such Options is not lowered and the conversion price of any such Convertible Securities is not lowered, none of such Options or Convertible Securities are amended to increase the number of shares issuable thereunder, and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Holders, () conversion or exercise of existing Options or Convertible Securities of the Company, so long as the exercise price of any such Options is not lowered and the conversion price of any such Convertible Securities is not lowered, none of such Options or Convertible Securities are amended to increase the number of shares issuable thereunder, and none of the terms or conditions of any such options are otherwise changed in any manner that materially and adversely affects any of the Holders, or () the issuances of Underlying Shares. Notwithstanding the foregoing, this Section 8(a) shall not apply with respect to: () any issuances of only Common Stock pursuant to an equity line of credit with the GEM Facility, any other Equity Line of Credit, or any “at-the-market” facility and () any issuances of Common Stock or any Convertible Securities in connection with any financing transaction to acquire Aircraft (as defined in the New Security Agreement) used in the ordinary course of business.
() Disclosure of Transactions and Other Material Information.
() Disclosure of Transaction. By no later than 8:30 a.m. (local time in New York, New York) on the first Trading Day after the date of this Agreement, the Company shall: () issue a press release (the “Press Release”) reasonably acceptable to the Holders describing the transactions contemplated by the New Transaction Documents; and () file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by the New Transaction Documents in the form required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and attaching all the material New Transaction Documents (the “8-K Filing”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material, non-public information (if any) provided to any of the Holders by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or
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similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Holders or any of their affiliates, on the other hand, shall have terminated and none of the Holders have been subject to any such obligation since the filing of the 8-K Filing.
() Limitations on Disclosure. Other than as required under the New Transaction Documents (but subject to any other disclosure obligations of the Company with respect thereto), the Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide any Holder with any material, non-public information regarding the Company or any of its Subsidiaries from and after the date hereof unless prior thereto such Holder shall have consented in writing to the receipt of such information and agreed with the Company to keep such information confidential. If any material, non-public information is required to be provided by the Company or any of its Subsidiaries to any Holder pursuant to the New Transaction Documents, the Company shall obtain each Holder’s prior written consent prior to providing such information to such Holder, and if any Holder fails to provide such written consent, the Company shall not be deemed to be in breach of any of the New Transaction Documents as a result of the failure to provide such information. To the extent that the Company delivers any material, non-public information to a Holder without such Holder’s prior written consent in breach of the foregoing sentence, the Company hereby covenants and agrees that such Holder shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information, provided that the Holder shall remain subject to applicable law. Subject to the foregoing, neither the Company, its Subsidiaries nor any Holder shall issue any press releases or any other public statements with respect to the transactions contemplated hereby (other than repeating information in substantial conformity with prior public disclosures permissibly made available to the public), except a Press Release and the 8-K Filing, filings required by the Exchange Act and disclosure related to any information required to be provided to a Holder under any New Transaction Documents that would otherwise constitute material nonpublic information; provided, however, the Company shall be entitled, without the prior approval of any Holder, to make any press release or other public disclosure with respect to such transactions () in substantial conformity with the 8-K Filing and () as is required by applicable law and regulations (provided that in the case of clause (A) above, each Holder shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of the applicable Holder (which may be granted or withheld in such Holder’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) submit for publication or otherwise cause or seek to publish any information naming any Holder or disclose the name of any Holder in any filing, announcement, release or otherwise; provided that, nothing in the foregoing shall be construed to prohibit the Company from making any submission or filing () which it is required to make by applicable law or pursuant to judicial process, () as required by federal securities law in connection with the filing of final New Transaction Documents with the SEC, or () to the extent such disclosure is required by law or regulations of the NYSE; provided further, that () such filing or submission shall contain only such information as is necessary to comply with applicable law or judicial process
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and () unless specifically prohibited by applicable law or court order, the Company shall promptly notify the Holders of the requirement to make such submission or filing and provide the Holders with a copy thereof, except in the 8-K Filing and as otherwise may be required by applicable law or regulations. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Holder shall have (unless expressly agreed to by a particular Holder after the date hereof in a written definitive and binding agreement executed by the Company and such particular Holder (it being understood and agreed that no Holder may bind any other Holder with respect thereto)) any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.
() Fees. The Company shall reimburse the Holders for all documented costs and expenses incurred by it or its affiliates in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the New Transaction Documents, including the structuring, negotiation and establishment of the letter of credit and the intercreditor and/or subordination agreement referred to in clauses (G)(b)(1)(x) and (G)(b)(1)(y), respectively, of the definition of “Permitted Indebtedness” in Section 1 of the New Notes (including, without limitation, any other reasonable fees and expenses in connection with due diligence and regulatory filings in connection therewith). The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer agent fees, DTC fees or broker’s commissions (other than for Persons engaged by the Holders) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and the Company shall hold the Holders harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth herein, each party to this Agreement shall bear its own expenses in connection with the entry into transactions contemplated by this Agreement.
() Indemnification. The Company hereby covenants and agrees to be bound by indemnification provisions set forth on Annex A to this Agreement.
() Governing Law. The terms and provisions of Section 9(a) (Governing Law; Jurisdiction; Jury Trial) of the Securities Purchase Agreement shall be incorporated herein, mutatis mutandis, as if set forth herein in full.
() Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
() Entire Agreement. This Agreement, together with the other New Transaction Documents and the Securities Purchase Agreement (as amended hereby), constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior
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negotiations, representations, warranties, commitments, offers, contracts and writings, written or oral, with respect to the subject matter hereof.
() Amendments and Waivers. No provision of this Agreement may be amended, modified or waived except by an instrument in writing signed by the Company and the Holders.
() Notices. All notices, requests, demands, claims and other communications hereunder shall be delivered in accordance with the notice provisions of the Securities Purchase Agreement.
() Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. No party may assign this Agreement without the prior written consent of the other parties.
() Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.
() Further Assurances. Each party shall execute and deliver such additional documents, instruments and agreements and take such further actions as may be reasonably necessary to effectuate the transactions contemplated by this Agreement.
() Existing Transaction Documents. Except as expressly amended or amended and restated by this Agreement, () the Existing Transaction Documents (other than the Existing Note upon consummation of the Exchange) shall remain in full force and effect, and () nothing in this Agreement shall be deemed to waive, amend, modify or release any rights or obligations of any party under the Existing Transaction Documents.
() Termination. This Agreement may be terminated by any Holder, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that the right to terminate this Agreement under this Section 9(j) shall not be available to such Holder if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of such Holder’s breach of this Agreement. Nothing contained in this Section 9(j) shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other New Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other New Transaction Documents.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.
COMPANY:
SURF AIR MOBILITY INC.
a Delaware corporation
By: ___/s/ Deanna White_______________
Name: Deanna White
Title: Chief Executive Officer
NOTE HOLDER:
HIGH TRAIL SPECIAL SITUATIONS LLC
By: ___/s/ Erik Helenek _______________
Name: Erik Helenek
Title: Authorized Signatory
WARRANT HOLDER:
HT INVESTMENTS MA LLC
By: ___/s/ Erik Helenek _______________
Name: Erik Helenek
Title: Authorized Signatory
[Signature Page to Omnibus Amendment and Exchange Agreement]
Annex A
Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Omnibus Amendment and Exchange Agreement between High Trail Special Situations LLC, HT Investments MA LLC and Surf Air Mobility Inc., of even date hereof (the “Agreement”), of which Agreement this Annex A forms a part.
In consideration of the execution and delivery of the Agreement by the Holders, and in addition to all of the Company’s other obligations thereunder, the Company shall defend, protect, indemnify and hold harmless each Holder and all of their respective stockholders, partners, members, officers, directors, employees and direct or indirect investors and any agents or other representatives of the foregoing (including, without limitation, those retained in connection with the transactions contemplated by the Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, relating to or based upon () any misrepresentation or breach of any representation or warranty made by the Company in the Agreement, () any breach of any covenant, agreement or obligation of the Company contained in the Agreement, and/or () any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) or which otherwise involves such Indemnitee that arises out of or results from () the execution, delivery, performance or enforcement of any of the Agreement (including, without limitation, any hedging or similar activities in connection therewith), or () the status of a Holder either as an investor in the Company pursuant to the transactions contemplated by the Agreement or as a party to the Agreement (including, without limitation, any hedging or similar activities in connection therewith or as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief); provided, however, that the Company will not be liable in any such case to a Holder or its related Indemnitees to the extent that any such claim, loss, damage, liability or expense arises primarily out of or is based primarily upon the inaccuracy of any representations and warranties made by such Holder in the Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.
Promptly after receipt by an Indemnitee of notice of the commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to be made against any indemnifying party, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying party if: () the indemnifying party has agreed in writing to pay such fees and expenses; () the indemnifying party
shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or () the named parties to any such Indemnified Liability (including, without limitation, any impleaded parties) include both such Indemnitee and the indemnifying party, and such Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee and the indemnifying party (in which case, if such Indemnitee notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying party), provided further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnitee. The Indemnitee shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnitee which relates to such Indemnified Liability. The indemnifying party shall keep the Indemnitee reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnitee hereunder, except to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action. The indemnification required hereunder shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Liabilities are incurred. The indemnity and contribution agreements contained herein shall be in addition to () any cause of action or similar right of the Indemnitees against the indemnifying party or others, and () any liabilities the indemnifying party may be subject to pursuant to the law.
Exhibit A
Form of New Senior Note
See attached.
Exhibit B
Form of New Term Note
See attached.
Exhibit C
Form of New Security Agreement
See attached.
Exhibit D
Form of New Subsidiary Guaranty
See attached.
Exhibit E
Form of New Intercreditor Agreement
See attached.
Exhibit F
Form of Collateral Questionnaire
See attached.
Exhibit 10.2
SURF AIR MOBILITY INC.
Senior Secured Convertible Note due 2027
Certificate No. 1
SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), for value received, promises to pay to HIGH TRAIL SPECIAL SITUATIONS LLC (the “Initial Holder”), or its registered assigns, one hundred ten percent (110%) of the principal sum of sixteen million eight hundred and fifty-seven thousand one hundred forty-two dollars and eighty nine cents ($16,857,142.89) (such principal sum, the “Principal Amount” and one hundred ten percent (110%) of such Principal Amount, the “Maturity Principal Amount”) on July 1, 2027, and to pay any outstanding interest thereon, as provided in this Note, in each case, as provided in and subject to the other provisions of this Note, including the earlier redemption, repurchase or conversion of this Note.
Unless otherwise indicated, references herein to “dollars” or “$” are to U.S. dollars.
Additional provisions of this Note are set forth on the other side of this Note.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, Surf Air Mobility Inc. has caused this instrument to be duly executed as of the date set forth below.
SURF AIR MOBILITY INC.
Date: July 1, 2026 By:
Name:
Title:
(Signature Page to Senior Secured Convertible Note due 2027, Certificate No. 1)
SURF AIR MOBILITY INC.
Senior Secured Convertible Note due 2027
This Note (this “Note” and, collectively with any Note issued in exchange therefor or in substitution thereof, the “Notes”) is issued by SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), and designated as its “Senior Secured Convertible Notes due 2027”.
Section . Definitions.
“Affiliate” has the meaning set forth in Rule 144 under the Securities Act.
“ATM Sales Agreement” has the meaning set forth in Section 8(X).
“Attribution Parties” means, collectively, the following Persons and entities: () any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issue Date, directly or indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, () any direct or indirect Affiliates of the Holder or any of the foregoing, () any Person acting or who could be deemed to be acting as a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) together with the Holder or any of the foregoing and () any other Persons whose beneficial ownership of the Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
“Authorized Denomination” means, with respect to the Notes, a Principal Amount thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof, or, if such Principal Amount then-outstanding is less than $1,000, then such outstanding Principal Amount.
“Bankruptcy Law” means Title 11, United States Code, or any similar U.S. federal or state or non-U.S. law for the relief of debtors.
“Board of Directors” means the board of directors of the Company or a committee of such board duly authorized to act on behalf of such board.
“Business Combination Event” has the meaning set forth in Section 9.
“Business Day” means any day other than a Saturday, a Sunday or any day on which commercial banks in The City of New York are authorized or required by law or executive order to close or be closed; provided, however, for clarification, commercial banks in The City of New York shall not be deemed to be authorized or required by law or executive order to close or be closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are open for use by customers on such day.
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“Capital Lease” means, with respect to any Person, any leasing or similar arrangement conveying the right to use any property, whether real or personal property, or a combination thereof, by that Person as lessee that, in conformity with GAAP, is required to be accounted for as a capital lease on the balance sheet of such Person.
“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a Capital Lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
“Capital Stock” of any Person means any and all shares of, interests in, rights to purchase, warrants or options for, participations in, or other equivalents of, in each case however designated, the equity of such Person, but excluding any debt securities convertible into such equity.
“Cash” means all cash and liquid funds.
“Cash Equivalents” means, as of any date of determination, any of the following: () marketable securities () issued or directly and unconditionally guaranteed as to interest and principal by the United States Government, or () issued by any agency of the United States Government, the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; () marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from Standard & Poor’s Corporation or at least P-1 from Moody’s Investors Service; () commercial paper maturing no more than one (1) year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from Standard & Poor’s Corporation or at least P-1 from Moody’s Investors Service; () certificates of deposit or bankers’ acceptances maturing within one (1) year after such date and issued or accepted by any commercial bank organized under the laws of the United States or any state thereof, or the District of Columbia that () is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator), and () has Tier 1 capital (as defined in such regulations) of not less than $5,000,000,000; and () shares of any money market mutual fund that () has substantially all of its assets invested continuously in the types of investments referred to in clauses (A) and (B) above, () has net assets of not less than $5,000,000,000, and () has the highest rating obtainable from either Standard & Poor’s Corporation or Moody’s Investors Service.
“Cash Sweep Amount” means, with respect to all Cash Sweep Dispositions, fifty percent (50%) of the gross cash or cash equivalents proceeds to the Company from all such Cash Sweep Dispositions.
“Cash Sweep Certification” has the meaning set forth in Section 4(C)(ii).
“Cash Sweep Dispositions” means any Disposition of the Electrification Assets or the SurfOS assets (including any corresponding Dispositions of Equity Interests in Surf Air Technologies Inc.), so long as any of the consideration received by the Company or any of its Subsidiaries in connection with such Disposition is cash or cash equivalents.
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“Cash Sweep Financing” means all Cash Sweep Dispositions.
“Cash Sweep Notice” has the meaning set forth in Section 4(C)(iii).
“Cash Sweep Payment” has the meaning set forth in Section 4(C)(i).
“Close of Business” means 5:00 p.m., New York City time.
“Closing Date Letter of Credit” has the meaning set forth in the New Term Note as in effect on the date hereof.
“Collateral” has the meaning set forth in the Security Agreements.
“Collateral Agent” means the Initial Holder in its capacity as collateral agent for the Holder and each Other Holder, together with any successor thereto in such capacity.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Stock” means the common stock, par value $0.0001 per share, of the Company, subject to Section 7(I).
“Common Stock Change Event” has the meaning set forth in Section 7(I)(i).
“Compliance Certification” has the meaning set forth in Section 8(J)(ii).
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to () any Indebtedness or other obligations of another Person, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; () any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and () all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.
“Control Agreement” has the meaning set forth in the Security Agreements.
“Controlled Account” has the meaning set forth in Section 8(J)(i).
“Conversion Consideration” has the meaning set forth in Section 7(E)(i).
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“Conversion Date” means the first Business Day on which the requirements set forth in Section 7(C)(i) or Section 7(D)(i) (as applicable) to convert this Note are satisfied.
“Conversion Price” means, as of any time, an amount equal to () one thousand dollars ($1,000) divided by () the Conversion Rate in effect at such time.
“Conversion Rate” initially means 896.0573 shares of Common Stock per $1,000 Principal Amount of Notes; provided, however, that the Conversion Rate is subject to adjustment pursuant to Section 7; provided, further, that whenever this Note refers to the Conversion Rate as of a particular date without setting forth a particular time on such date, such reference will be deemed to be to the Conversion Rate immediately after the Close of Business on such date.
“Conversion Settlement Date” has the meaning set forth in Section 7(E)(iv).
“Conversion Value” means, in respect of any notice, the product of () the Conversion Rate in effect as of the date of determination; and () the Daily VWAP per share of Common Stock on the date of determination.
“Convertible Securities” means any Capital Stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.
“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by the Company or in which the Company now holds or hereafter acquires any interest.
“Copyrights” means all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, any State thereof, or of any other country.
“Covering Price” has the meaning set forth in Section 7(E)(v)(1).
“Daily Volume” means, for any VWAP Trading Day, the aggregate dollar trading volume of the Common Stock as reported by Bloomberg and displayed under the heading “Bloomberg Value Traded” on Bloomberg page “SRFM US <EQUITY> VAP” (or its equivalent successor ticker or, if such page is not available, its equivalent successor page) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such VWAP Trading Day. The Daily Volume will be determined without regard to after-hours trading or any other trading outside of the regular trading session.
“Daily VWAP” means, for any VWAP Trading Day, the per share volume-weighted average price of the Common Stock as reported by Bloomberg and displayed under the heading “Bloomberg VWAP” on Bloomberg page “SRFM US <EQUITY> VAP” (or its equivalent successor ticker or, if such page is not available, its equivalent successor page) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such VWAP Trading Day (or, if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such VWAP Trading Day, determined, using a volume-weighted average price method, by a nationally recognized
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independent investment banking firm selected by the Company). The Daily VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session.
“Default” means any event that is (or, after notice, passage of time or both, would be) an Event of Default.
“Default Interest” has the meaning set forth in Section 10(D).
“Deferred Partial Redemption Payment” has the meaning set forth in Section 4(A).
“Disposition” means the sale, transfer, license, lease or other disposition of any property by the Company or any Subsidiary, including any sale and leaseback transaction and any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Disqualified Stock” means, with respect to any Person, any Capital Stock that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:
in the case of each of clauses (A), (B) and (C), at any point prior to the one hundred eighty-first (181st) day after the Maturity Date.
“DTC” means The Depository Trust Company.
“Electrification Assets” means the Company’s and its Subsidiaries’ current and future right, title and interest in and to their electrification technology program and any related contracts, products, services and materials intended to outfit new or existing aircraft by designing, developing, manufacturing, maintaining, selling and supporting fully electric or hybrid-electric powertrain technology for aircraft.
“Eligible Exchange” means any of The New York Stock Exchange, The NYSE American LLC, The Nasdaq Capital Market, The Nasdaq Global Market or The Nasdaq Global Select Market (or any of their respective successors).
“Equity Conditions” will be deemed to be satisfied as of any date if all of the following conditions are satisfied as of such date and on each of the twenty (20) previous Trading Days: () the shares issuable pursuant to this Note are Freely Tradable; () the Holder is not in possession of
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any material non-public information; () the issuance of such shares will not be limited by Section 7(J); () such shares will satisfy Section 7(F)(i); () no pending, proposed or intended Fundamental Change has occurred that has not been abandoned, terminated or consummated; () the Daily VWAP per share of the Common Stock is not less than seventy-five cents ($0.75); () () the average daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the New York Stock Exchange over such twenty (20) consecutive Trading Day period is not less than two million dollars ($2,000,000), and () on each Trading Day during such twenty (20) consecutive Trading Day period, the daily dollar trading volume is not less than one million dollars ($1,000,000); () no delisting or suspension by the principal, in terms of volume, Eligible Exchange on which the Company is then listed or traded has been threatened (with a reasonable prospect of delisting or suspension occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or is reasonably likely to occur or pending as evidenced by (x) a writing by such Eligible Exchange or (y) the Company falling below the minimum listing maintenance requirements, if applicable, of such Eligible Exchange; and () no Event of Default will have occurred that has not been waived and no Default will have occurred and be continuing which has not been waived.
“Equity Interest” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including preferred stock or membership interests (however designated, whether voting or non-voting), of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) and including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the Securities Act), and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership.
“Equity Line of Credit” means () the Company’s existing GEM Facility and () any other equity line of credit solely for the issuance of common stock approved by written agreement by the Required Holders (which approval may be granted at any time by the Required Holders in their sole discretion and which equity line of credit shall not be amended or otherwise modified in a manner adverse to the Holder after the Required Holders have granted such approval).
“Equity Rights” shall mean, with respect to any Person, any then-outstanding subscriptions, Options, warrants, commitments, preemptive rights, convertible debt, or other equity-linked securities or agreements of any kind for the issuance or sale, of any additional Equity Interests of any class, or partnership or other ownership interests of any type in, such Person.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
“Event of Default” has the meaning set forth in Section 10(A).
“Event of Default Acceleration Amount” means, with respect to the delivery of a notice pursuant to Section 10(B)(ii) declaring this Note (or a portion hereof) to be due and payable upon compliance with the conditions set forth in that section on account of an Event of Default, a cash amount equal to the greater of () the sum of () one hundred fifteen percent (115%) of 110% of the then outstanding principal amount of this Note (or such lesser principal amount accelerated pursuant to such notice), and () the accrued and unpaid interest on this Note and () the sum of () one hundred ten percent (110%) of the product of () the Conversion Rate in effect as of the Trading
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Day immediately preceding the date that the Holder delivers such notice pursuant to Section 10(B)(ii); () the total then outstanding Principal Amount of this Note (or such lesser principal amount accelerated pursuant to such notice, in each case, expressed in thousands); and () the greater of (x) the highest Daily VWAP per share of Common Stock occurring during the thirty (30) consecutive VWAP Trading Days ending on, and including, the VWAP Trading Day immediately before the date the Holder delivers such notice pursuant to Section 10(B)(ii) and (y) the highest Daily VWAP per share of Common Stock occurring during the five (5) consecutive VWAP Trading Days ending on, and including, the VWAP Trading Day immediately before the date the applicable Event of Default occurred (or the date on which the Default underlying such Event of Default initially occurred, if different than the date on which the Event of Default occurred) and () the accrued and unpaid interest on this Note; provided, that in the event that the amount in clause (A) of this definition is greater than the amount in clause (B) of this definition and (x) if such amount is paid within three (3) Business Days after the Holder has delivered the Event of Default Redemption Notice to the Company, then such Event of Default Acceleration Amount for such principal amount will be equal to the sum of () one hundred ten percent (110%) of the then outstanding principal amount of this Note (or such lesser principal amount accelerated pursuant to such notice) plus () the accrued and unpaid interest on this Note, and (y) if such amount is paid more than three (3) Business Days after the Holder has delivered the Event of Default Redemption Notice to the Company, then such Event of Default Acceleration Amount shall be equal to the sum of () one hundred fifteen percent (115%) of 110% of the then-remaining outstanding principal amount of this Note (or such lesser principal amount accelerated pursuant to such notice), and () the accrued and unpaid interest on this Note.
“Event of Default Notice” has the meaning set forth in Section 10(C).
“Event of Default Redemption Notice” has the meaning set forth in Section 10(B).
“Ex-Dividend Date” means, with respect to an issuance, dividend or distribution on the Common Stock, the first date on which shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution (including pursuant to due bills or similar arrangements required by the relevant stock exchange). For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of the Common Stock under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.
“Excess Shares” has the meaning set forth in Section 7(J)(i).
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Expiration Date” has the meaning set forth in Section 7(G)(i)(5).
“Expiration Time” has the meaning set forth in Section 7(G)(i)(5).
“Forced Conversion” has the meaning set forth in Section 7(D)(i).
“Forced Conversion Equity Conditions” will be deemed to be satisfied as of any date if all of the following conditions are satisfied as of such date: () the shares issuable pursuant to this Note are Freely Tradable; () the Holder is not in possession of any material non-public information;
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() the issuance of such shares will not be limited by Section 7(J)(i); provided that if the only condition preventing a Forced Conversion is this clause (C), then the Company may effect a Forced Conversion up to the limits set forth in Section 7(J)(i) and the Holder will () use reasonable efforts to sell any shares of Common Stock of the Company held by such Holder and () if the Holder has sold a sufficient amount of the Common Stock of the Company to permit the Forced Conversion of at least the lesser of (x) $10,000,000 of the outstanding principal amount of this Note and (y) the portion of the remaining outstanding principal amount of this Note not permitted to be subject to such Forced Conversion by Section 7(J)(i), notify the Company thereof (whereupon, for the avoidance of doubt, the Company may effect such delayed Forced Conversion without regard to any otherwise applicable limit on the number of Forced Conversion notices); () such shares will satisfy Section 7(F)(i); () no pending, proposed or intended Fundamental Change has occurred that has not been abandoned, terminated or consummated; () no delisting or suspension by the principal, in terms of volume, Eligible Exchange on which the Company is then listed or traded has been threatened (with a reasonable prospect of delisting or suspension occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or is reasonably likely to occur or pending as evidenced by (x) a writing by such Eligible Exchange or (y) the Company falling below the minimum listing maintenance requirements, if applicable, of such Eligible Exchange; and () no Event of Default will have occurred that has not been waived and no Default will have occurred and be continuing which has not been waived.
“Forced Conversion Trigger” means () the Last Reported Sale Price exceeds one hundred fifty percent (150%) of the Conversion Price on the date hereof (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization (in each case other than any voluntary adjustment made by the Company pursuant to Section 7(H)(i))) on each of twenty (20) consecutive VWAP Trading Days beginning after the Issue Date and ending on the date upon which the Company Conversion Notice is delivered to the Holder and () the Forced Conversion Equity Conditions are satisfied on each of the previous twenty (20) consecutive VWAP Trading Days.
“Freely Tradable” means, with respect to any shares of Common Stock issued or issuable pursuant to this Note, that () such shares are (or when issued, will be) eligible to be resold pursuant to an effective registration statement and upon such resale would not constitute “restricted securities” within the meaning of Rule 144, or would be eligible to be offered, sold or otherwise transferred by the Holder pursuant to Rule 144, without any requirements as to volume, manner of sale, availability of current public information (other than as then satisfied, to the extent applicable) or notice under the Securities Act and without any requirement for registration under any state securities or “blue sky” laws; () such shares are (or, when issued (upon resale pursuant to the relevant registration statement in the case of clause (A)) and provision of customary representations to the transfer agent, will be) () represented by book-entries at DTC and identified therein by an “unrestricted” CUSIP number; () not represented by any certificate that bears a legend referring to transfer restrictions under the Securities Act or other securities laws; and () listed and admitted for trading, without suspension or material limitation on trading, on an Eligible Exchange; and () no delisting or suspension by such Eligible Exchange is pending or has been threatened (with a reasonable prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as evidenced by (x) a writing by such Eligible Exchange or (y) the Company falling below the minimum listing maintenance requirements of such Eligible Exchange.
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“Fundamental Change” means any of the following events:
For purposes of this definition, (x) any transaction or event described in both clause (A) and in clause (B) above (without regard to the proviso in clause (B)) will be deemed to occur solely pursuant to clause (B) above (subject to such proviso); and (y) whether a Person is a “beneficial owner” and whether shares are “beneficially owned” will be determined in accordance with Rule 13d-3 under the Exchange Act.
“Fundamental Change Notice” has the meaning set forth in Section 6(C).
“Fundamental Change Repurchase Date” means the date as of which this Note must be repurchased for cash in connection with a Fundamental Change, as provided in Section 6(B).
“Fundamental Change Repurchase Price” means, with respect to this Note (or any portion of this Note to be repurchased) upon a Repurchase Upon Fundamental Change, a cash amount equal to the greater of () the sum of () one hundred ten percent (110%) of the Principal Amount of this Note (or such lesser principal amount to be repurchased pursuant to such notice) and () the accrued and unpaid interest on this Note and () the sum of () one hundred ten percent (110%) of the product of () the Conversion Rate in effect as of the Trading Day immediately preceding the effective date of such Fundamental Change; () the then outstanding Principal Amount of this Note, or such lesser principal amount to be repurchased pursuant to such notice
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(expressed in thousands); and () the highest Daily VWAP per share of Common Stock occurring during the period commencing five (5) Trading Days prior to the earlier of (x) the effective date of such Fundamental Change and (y) the date that such Fundamental Change is publicly announced and ending on the date immediately preceding the Fundamental Change Repurchase Date and () the accrued and unpaid interest on this Note.
“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time; provided the definitions set forth in this Note and any financial calculations required thereby shall be computed to exclude any change to lease accounting rules from those in effect pursuant to Financial Accounting Standards Board Accounting Standards Codification 840 (Leases) and other related lease accounting guidance as in effect on the date hereof.
“GEM Facility” means that Second Amended and Restated Share Purchase Agreement dated as of February 8, 2023, as amended and restated, by and between Surf Air Global Limited, a company limited by shares formed under the laws of the British Virgin Islands, Gem Global Yield LLC SCS, a “société en commandite simple” formed under the laws of Luxembourg, as purchaser, and Gem Yield Bahamas Limited, a limited company formed under the laws of the Commonwealth of the Bahamas, as in effect on the Issue Date.
“Holder” means the person in whose name this Note is registered on the books of the Company, which initially is the Initial Holder.
“Holder Approved Bank” means () HSBC Bank USA, N.A., () any of Citibank, Wells Fargo, Barclays, Bank of America, Morgan Stanley and JPMorgan, or () any other U.S.-based bank with a rating by S&P or Moody’s of at least A-/A3 that is reasonably acceptable to the Collateral Agent; provided, that, in the case of each of the foregoing clauses (i) through (iii) if any proceeding under any bankruptcy, insolvency or other similar applicable law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property shall have occurred in respect of any of the foregoing Persons, or if the long-term issuer credit rating of any such Person by either S&P or Moody’s is below A-/A3, such Person shall no longer be a “Holder Approved Bank”.
“Holder Conversion Notice” has the meaning set forth in Section 7(C)(i).
The term “including” means “including without limitation,” unless the context provides otherwise.
“Indebtedness” means, indebtedness of any kind, including, without duplication () all indebtedness for borrowed money or the deferred purchase price of property or services, including reimbursement and other obligations with respect to surety bonds and letters of credit, () all obligations evidenced by notes, bonds, debentures or similar instruments, () all Capital Lease Obligations, () all Contingent Obligations, and () Disqualified Stock.
“Initial Holder” has the meaning set forth in the cover page of this Note.
“Intellectual Property” means all of the Company’s Copyrights; Trademarks; Patents; Licenses; trade secrets and inventions; mask works; the Company’s applications therefor and
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reissues, extensions, or renewals thereof; and the Company’s goodwill associated with any of the foregoing, together with the Company’s rights to sue for past, present and future infringement of Intellectual Property and the goodwill associated therewith.
“Intercreditor Agreement” has the meaning provided for such term in the Omnibus Amendment.
“Investment” means () any beneficial ownership (including stock, partnership or limited liability company interests) of or in any Person, () any loan, advance or capital contribution to any Person, () the acquisition of all, or substantially all, of the assets of another Person, or () the purchase of any assets of another Person for greater than the fair market value of such assets to solely the extent of the amount in excess of the fair market value.
“Issue Date” means July 1, 2026.
“KORE Facility” means that certain Factoring and Security Agreement, dated as of August 9, 2024, between Southern Airways Express, LLC, a Delaware limited liability company, and KORE Capital Corporation, a Virginia corporation (as amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time).
“L/C Availability” has the meaning set forth in the New Term Note as in effect on the date hereof.
“LamVen Note” means that certain Secured Promissory Note dated as of November 14, 2024 (as adjusted, amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time) made by the Company in favor of LamVen LLC.
“Last Reported Sale Price” of the shares of Common Stock for any Trading Day means the closing sale price per share (or, if no closing sale price is reported, the average of the last bid price and the last ask price per share or, if more than one in either case, the average of the average last bid prices and the average last ask prices per share) of Common Stock on such Trading Day as reported in composite transactions for the principal U.S. national or regional securities exchange on which the shares of Common Stock are then listed. If the Common Stock is not listed on a U.S. national or regional securities exchange on such Trading Day, then the Last Reported Sale Price will be the last quoted bid price per share of Common Stock on such Trading Day in the over-the-counter market as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock is not so quoted on such Trading Day, then the Last Reported Sale Price will be the average of the mid-point of the last bid price and the last ask price per share of Common Stock on such Trading Day from a nationally recognized independent investment banking firm selected by the Company.
“Letter of Credit” has the meaning set forth in the New Term Note as in effect on the date hereof.
“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests.
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“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, and any lease in the nature of a security interest; provided, that for the avoidance of doubt, licenses, strain escrows and similar provisions in collaboration agreements, research and development agreements that do not create or purport to create a security interest, encumbrance, levy, lien or charge of any kind shall not be deemed to be Liens for purposes of this Note.
“Market Disruption Event” means, with respect to any date, the occurrence or existence, during the one-half hour period ending at the scheduled close of trading on such date on the principal, in terms of volume, Eligible Exchange on which the Common Stock is listed for trading or trades, of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.
“Market Stock Payment Price” means, with respect to any Partial Redemption Stock Payment Date, an amount equal to ninety-five percent (95%) of the lowest Daily VWAP during the five (5) VWAP Trading Day period ending on and including the VWAP Trading Day immediately prior to such Partial Redemption Stock Payment Date.
“Maturity Date” means July 1, 2027.
“Maturity Principal Amount” has the meaning set forth in the cover page of this Note; provided, however, that the Maturity Principal Amount of this Note will be subject to reduction pursuant to Section 4, Section 5, Section 6, and Section 7.
“Maximum Percentage” has the meaning set forth in Section 7(J)(i).
“New Term Note” means that certain $30,000,000 Senior Secured Term Note due 2028 issued by the Company to the Initial Holder on the Issue Date.
“Omnibus Amendment” means that certain Omnibus Amendment and Exchange Agreement, dated as of June 30, 2026, by and among the Company, the Initial Holder and HT Investments MA LLC.
“Open of Business” means 9:00 a.m., New York City time.
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
The term “or” is not exclusive, unless the context expressly provides otherwise.
“Other Holder” means any person in whose name any Other Note is registered on the books of the Company.
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“Other Notes” means any Notes that are of the same class of this Note and that are represented by one or more certificates other than the certificate representing this Note (including the New Term Note).
“Palantir Agreements” means, collectively, the Company’s and its Subsidiaries’ rights under () the Palantir Master Subscription Agreement dated May 18, 2021, as amended (as amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time) by and between the Company and Palantir Technologies, Inc. (“Palantir”); () that certain Amended and Restated Order No. 1 dated as of May 18, 2021, as amended, by and between the Company and Palantir (as amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time); () the Order #1 Share Issuance Agreement dated September 29, 2023, as amended, by and between the Company and Palantir; () the Order Form (Order #2) dated July 1, 2025, by and between the Company and Palantir; () the Order Form (Order #3) dated August 1, 2025, by and between the Company and Palantir; () the Order Form (Order #4) dated November 10, 2025, by and between the Company and Palantir; and () the Order Form (Order #5) dated June 19, 2026 and effective January 1, 2026, by and between the Company and Palantir, which provide the Company and its Subsidiaries subscription access to certain of Palantir’s proprietary commercial software platforms, including but not limited to Foundry and Palantir’s Artificial Intelligence Platform (AIP).
“Park Lane” means Park Lane Investments LLC.
“Partial Redemption Date” means, with respect to this Note, () the Issue Date and thereafter the first calendar day of each month beginning on August 1, 2026 and () if not otherwise included in clause (A), the Maturity Date.
“Partial Redemption Notice” has the meaning set forth in Section 4(A).
“Partial Redemption Payment” means, for each date that is a Partial Redemption Date, an amount, as determined by the Holder in its sole discretion, equal to up to () for any Partial Redemption Payment for which the Company has provided a valid Partial Redemption Stock Payment Notice to make such payment in shares of Common Stock pursuant to Section 5(B), the greater of () six percent (6.0%) of the aggregate Daily Volume of the Common Stock for all VWAP Trading Days during the applicable Volume Redemption Period (subject to a cap of three million dollars ($3,000,000) (the “Volume Cap”) for any individual Partial Redemption Date, provided that the Holder and the Company may agree to increase the size of any Volume Cap from time to time by mutual written consent), and () two million dollars ($2,000,000), or () for any other Partial Redemption Payment that is payable in cash, two million dollars ($2,000,000); provided in each case that the Holder and the Company may agree to increase the size of any Partial Redemption Payment from time to time by mutual written consent.
“Partial Redemption Stock Payment Date” has the meaning set forth in Section 5(B).
“Partial Redemption Stock Payment Delivery Date” has the meaning set forth in Section 5(B).
“Partial Redemption Stock Payment Notice” has the meaning set forth in Section 5(B).
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“Partial Redemption Stock Payment Period” has the meaning set forth in Section 5(B).
“Patent License” means any written agreement granting any right with respect to any invention covered by a Patent that is in existence or a Patent application that is pending, in which agreement the Company now holds or hereafter acquires any interest.
“Patents” means all letters patent of, or rights corresponding thereto, in the United States or in any other country, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding thereto, in the United States or any other country.
“Permitted Indebtedness” means () Indebtedness evidenced by this Note, the New Term Note, and all other Senior Secured Convertible Notes issued pursuant to the Omnibus Amendment or the other Transaction Documents; () Indebtedness actually disclosed pursuant to the Omnibus Amendment as of the date of the Omnibus Amendment, other than any such Indebtedness (whether or not currently outstanding) owing to JGB Capital, L.P., JGB Partners, L.P., Deepdale Investors, LLC, or any affiliates of any of the foregoing (any such Indebtedness being referred to as “JGB Indebtedness”); () reimbursement agreement with respect to the Closing Date Letter of Credit, which reimbursement agreement is delivered as an exhibit pursuant to the Disclosure Schedules to the Omnibus Amendment; () Indebtedness evidenced by the Modified LamVen Note (as defined in the Intercreditor Agreement) in an aggregate principal amount not to exceed $2,600,000; () Indebtedness to trade creditors incurred in the ordinary course of business consistent with past practices; () Subordinated Indebtedness of the Company; () Indebtedness of any Subsidiary outstanding at any time secured by, and only by, () Liens on Aircraft (as such term is defined in the Security Agreement), parts, engines, components and/or other assets affixed or related thereto that are not Collateral (as such term is defined in the Security Agreement) and proceeds thereof, and any insurance proceeds and required cash deposits in respect thereof, and () either () cash collateral that is not Collateral (as such term is defined in the Security Agreement) funded by a third-party and held in escrow subject to release to the applicable Subsidiary only upon the establishment of (x) the letter of credit referred to in the proceeding clause (G)(b)(2), and (y) the intercreditor and/or subordination agreement referred to in the final proviso at the end of this clause (G), so long as () such cash collateral is contractually required to be, and is, applied to prepay outstanding principal of such Indebtedness actually advanced (together with accrued and unpaid scheduled interest thereon), on a dollar-for-dollar basis (without premium or penalty and excluding any original issue discount, it being understood and agreed that any portion of such Indebtedness consisting of original issue discount may (a) continue to be outstanding as principal after such prepayment to the extent otherwise permitted to remain outstanding under this clause (G), and (b) be paid as and when due and scheduled in accordance with the definitive documentation evidencing such Indebtedness to the extent otherwise permitted to be paid under this Note, the New Term Note and any applicable intercreditor and/or subordination agreement), in the event that the letter of credit and the intercreditor and/or subordination agreement referred to in the foregoing clauses (G)(b)(1)(x) and (G)(b)(1)(y), respectively, are not established by the date that is thirty (30) consecutive calendar days after the date of initial incurrence of such Indebtedness (and without any default or event of default under the legal documentation evidencing such Indebtedness resulting from such application of such cash collateral and/or from such failure of such letter of credit or intercreditor and/or subordination agreement to be established), and () the Holder is, at all times that such cash collateral is so held in escrow, designated as a third-party beneficiary of the release provisions governing such cash collateral to the satisfaction of Holder in
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its sole discretion, and/or () a letter of credit that is backed solely by third party assets (which assets are themselves not Collateral), so long as the intercreditor and/or subordination agreement referred to in the final proviso at the end of this clause (G) has been established and remains in full force and effect; provided that such Indebtedness (w) at no time outstanding exceeds the fair market value in aggregate of the assets described in the foregoing clause (G)(a) and clauses (G)(b)(1) or (G)(b)(2) (as in effect at such time), taken together, that secure such Indebtedness, (x) is not incurred by the Company or any Subsidiary (other than Southern Airways Pacific, LLC, Southern Airways Express, LLC, N107KA, Inc., N208EE, Inc. or N803F, Inc. (collectively, the “Aircraft-Owning Subsidiaries”)), (y) is non-recourse to the Company or any Subsidiary of the Company (other than the Aircraft-Owning Subsidiaries), and (z) is not secured, in any event, by any Collateral (as such term is defined in the Security Agreement), provided, further, that, the Company, or any Subsidiary of the Company, may guaranty such Indebtedness if such guaranty is unsecured and subject to an intercreditor and/or subordination agreement entered into by, and acceptable in its sole discretion to, Holder; () other unsecured Indebtedness in an aggregate principal amount not to exceed $250,000 so long as such unsecured Indebtedness does not () have a final maturity date, amortization payment, sinking fund, put right, mandatory redemption or other repurchase obligation at the option of the lender or holder of such Indebtedness, or be prepayable at the option of the Company, in any case earlier than one hundred eighty-one (181) days following the Maturity Date or () have any covenants that are more restrictive on the Company in any material respect than the covenants set forth in this Note; () Contingent Obligations that are guarantees of the Indebtedness described in clauses (A) through (H); and () extensions, refinancings and renewals of any items of Permitted Indebtedness (other than any Indebtedness repaid with the proceeds of this Note), provided that the principal amount is not increased or the terms modified to impose materially more burdensome terms upon the Company or its Subsidiaries, as the case may be, and provided further, that if the lender of any such proposed extension, refinancing or renewal of Permitted Indebtedness incurred hereunder is different from the lender of the Permitted Indebtedness to be so extended, refinanced or renewed then, in addition to the foregoing proviso, such Permitted Indebtedness shall also not () have a final maturity date, amortization payment, sinking fund, put right, mandatory redemption or other repurchase obligation at the option of the lender or holder of such indebtedness, or be prepayable at the option of the Company, in any case earlier than one hundred eighty-one (181) days following the Maturity Date or () have any covenants that are more restrictive on the Company in any material respect than the covenants set forth in this Note.
“Permitted Intellectual Property Licenses” means () Intellectual Property licenses actually disclosed pursuant to the Omnibus Amendment as of the date of the Omnibus Amendment, () non-perpetual Intellectual Property licenses granted in the ordinary course of business on arm’s length terms consisting of the licensing of technology, the development of technology or the providing of technical support which may include licenses with unlimited renewal options solely to the extent such options require mutual consent for renewal or are subject to financial or other conditions as to the ability of licensee to perform under the license; provided such license was not entered into during an Event of Default or continuance of a Default and () licenses granted in connection with the Palantir Agreements or any SurfOS assets.
“Permitted Investment” means: () Investments actually disclosed pursuant to the Omnibus Amendment as in effect as of the Issue Date; () () marketable direct obligations issued or unconditionally guaranteed by the United States Government or any agency or any State thereof
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maturing within one year from the date of acquisition thereof, () commercial paper maturing no more than one year from the date of creation thereof and currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, () certificates of deposit issued by any bank headquartered in the United States with assets of at least five billion dollars ($5,000,000,000) maturing no more than one year from the date of investment therein, and () money market accounts; () Investments accepted in connection with Permitted Transfers; () Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of the Company’s business; () Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers in the ordinary course of business and consistent with past practice, provided that this clause (E) shall not apply to Investments consisting of credit extensions in the ordinary course of business and consistent with past practice by the Company in any Subsidiary thereof; () Investments consisting of () loans not involving the net transfer on a substantially contemporaneous basis of cash proceeds to employees, officers or directors relating to the purchase of Capital Stock of the Company pursuant to employee stock purchase plans or other similar agreements approved by the Company’s Board of Directors and () travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, provided that the aggregate of all such loans outstanding may not exceed fifty thousand dollars ($50,000) at any one time outstanding; () Investments in Wholly Owned Subsidiaries (which for purposes of this definition includes Surf Air Technologies Inc.); () Permitted Intellectual Property Licenses; () Investments in cash into joint ventures, so long as () such Investment is made on an arms’-length basis and () the equity interests in such joint venture have been pledged to the Collateral Agent in accordance with the terms of the Security Agreement; and () additional Investments that do not exceed six hundred thousand dollars ($600,000) in the aggregate in any twelve (12) month period.
“Permitted Liens” means any and all of the following: () Liens actually disclosed pursuant to the Omnibus Amendment as of the date of the Omnibus Amendment, other than any such Liens securing, or otherwise relating to or granted in connection with the incurrence of, any JGB Indebtedness; () Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested or negotiated in good faith by appropriate proceedings; provided, that the Company maintains adequate reserves therefor in accordance with GAAP; () Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of business; provided, that the payment thereof is not yet required; () Liens arising from judgments, decrees or attachments in circumstances which do not constitute a Default or an Event of Default hereunder; () the following deposits, to the extent made in the ordinary course of business: deposits under workers’ compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than Liens arising under ERISA or environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds; () leasehold interests in leases or subleases and licenses granted in the ordinary course of the Company’s business and not interfering in any material respect with the business of the licensor; () Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paid on
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or before the date they become due; () Liens on insurance proceeds securing the payment of financed insurance premiums that are promptly paid on or before the date they become due (provided that such Liens extend only to such insurance proceeds and not to any other property or assets); () statutory and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and brokerage firms; () easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business so long as they do not materially impair the value or marketability of the related property; () Liens on Cash or Cash Equivalents securing obligations permitted under clauses (C) and (G) of the definition of Permitted Indebtedness; () Liens in favor of Holder or the Collateral Agent; () Liens on Aircraft (as such term is defined in the Security Agreement) and any insurance proceeds and required cash deposits in respect thereof, in each case, securing Indebtedness permitted under clause (H) of the definition of Permitted Indebtedness; () other Liens securing Indebtedness not to exceed $250,000 in the aggregate and so long as the assets subject to such Liens are not Collateral; () Permitted Intellectual Property Licenses; () Liens securing Indebtedness permitted under clause (D) of the definition of “Permitted Indebtedness”; and () Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clauses (A) through (P) above (other than any Indebtedness repaid with the proceeds of this Note); provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced (as may have been reduced by any payment thereon) does not increase.
“Permitted Transfers” means () dispositions of inventory sold, and Permitted Intellectual Property Licenses entered into, in each case, in the ordinary course of business, () dispositions of worn-out, obsolete or surplus property at fair market value in the ordinary course of business; () dispositions of Aircraft and other Equipment (each as defined in the Security Agreement) at fair market value in the ordinary course of business; () dispositions of accounts or payment intangibles (each as defined in the UCC) resulting from the compromise or settlement thereof in the ordinary course of business for less than the full amount thereof; () transfers of Intellectual Property constituting Permitted Investments in Subsidiaries under clause (G) of Permitted Investments; () dispositions of Excluded Collateral (as defined in the Security Agreement), () other transfers of assets to any joint venture so long as such transfer was made on an arms’-length basis and the equity interests in such joint venture have been pledged to the Collateral Agent in accordance with the terms of the Security Agreement; () other transfers of assets which have a fair market value of not more than six hundred thousand dollars ($600,000) in the aggregate in any twelve (12) month period; and () any Disposition of the Electrification Assets or the SurfOS assets (including any corresponding Dispositions of Equity Interests in Surf Air Technologies Inc.), so long as (x) if any portion of such Disposition constitutes a Cash Sweep Disposition, () the counterparty in such Disposition shall wire 50% of the gross proceeds of such portion of such Disposition directly into a Controlled Account (it being understood and agreed, for the avoidance of doubt, that any such wire of such amount of gross proceeds may simultaneously satisfy both this sub-clause (x)(i) and sub-clause (x)(i) of clause (I) of the definition of “Permitted Transfers” in the New Term Note), and () the Holder may require that the Company make a Cash Sweep Payment with respect to the portion of such Disposition constituting a Cash Sweep Disposition pursuant to the terms of Section 4(C) hereof, to the extent not applied as a Cash Sweep Payment (as defined in the New Term Note) in accordance with Section 4(D) of the New Term Note, and (y) if any portion of such Disposition does not constitute a Cash Sweep Disposition, the Equity Interests or other non-cash assets
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received in connection with such portion of the Disposition shall be Collateral in accordance with the terms of the Security Agreement; provided that any proceeds received from Permitted Transfers of described in clauses (A) through (I) of the definition hereof of Collateral (as defined in the Security Agreement) shall be reinvested in Company assets, which in the Company’s good faith determination shall be similar assets to the assets disposed in such Permitted Transfer of Collateral, which shall constitute Collateral.
“Person” or “person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
“PFG Facility” means that certain Convertible Note Purchase Agreement, dated as of June 21, 2023, by and between Surf Air Mobility Inc., a Delaware corporation, Surf Air Global Limited, a company limited by shares formed under the laws of the British Virgin Islands, and Partners for Growth V, L.P., as amended by that certain () Consent and Amendment, dated as of November 14, 2024, by and among Surf Air Global Limited, a company limited by shares formed under the laws of the British Virgin Islands, Surf Air Mobility Inc., a Delaware corporation, LamVen LLC and Partners for Growth V, L.P. and () Consent and Second Amendment to Convertible Note Purchase Agreement, dated as of even date herewith, by and among, Surf Air Global Limited, a company limited by shares formed under the laws of the British Virgin Islands, Surf Air Mobility Inc., a Delaware corporation, and the Subsidiaries of the foregoing, and Partners for Growth V, L.P., acknowledged and agreed to by Initial Holder, LamVen LLC, Park Lane Investments LLC and HT Investments MA LLC (as amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time).
“Principal Amount” has the meaning set forth in the cover page of this Note; provided, however, that the Principal Amount of this Note will be subject to reduction () pursuant to Section 4(D), Section 5, Section 6, and Section 7 and () by an amount equal to () the sum of (x) the sum of all Cash Sweep Payments made pursuant to Section 4(C) made prior to the date of determination of the Principal Amount of this Note then outstanding plus (y) the sum of all Partial Redemption Payments (including any Deferred Partial Redemption Payments) made prior to the date of determination of the Principal Amount of this Note then outstanding, divided by () 1.10.
“Reference Property” has the meaning set forth in Section 7(I)(i)(4).
“Reference Property Unit” has the meaning set forth in Section 7(I)(i)(4).
“Reported Outstanding Share Number” has the meaning set forth in Section 7(J)(i).
“Repurchase Upon Fundamental Change” means the repurchase of any Note by the Company pursuant to Section 6.
“Required Holders” has the meaning set forth in the Securities Purchase Agreement.
“Required Reserve Amount” has the meaning in Section 8(Q).
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“Requisite Stockholder Approval” means the stockholder approval contemplated by Section 312.03(c) of the NYSE’s Listed Company Manual (or similar rule of the principal, in terms of volume, Eligible Exchange on which the Common Stock is listed for trading) with respect to the issuance of shares of Common Stock upon conversion of the Notes in excess of the limitations imposed by such rule; provided, however, that the Requisite Stockholder Approval will be deemed to be obtained if, due to any amendment or binding change in the interpretation of the applicable listing standards of New York Stock Exchange (or of the principal, in terms of volume, Eligible Exchange on which the Common Stock is listed for trading), such stockholder approval is no longer required for the Company to settle all conversions of this Note by delivering shares of Common Stock without limitation pursuant to Section 7(B).
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Scheduled Trading Day” means any day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal, in terms of volume, Eligible Exchange on which the Common Stock is listed for trading. If the Common Stock is not so listed or traded, then “Scheduled Trading Day” means a Business Day.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Securities Purchase Agreement” means that certain Securities Purchase Agreement, dated as of November 10, 2025, by and among the Company, the Initial Holder and HT Investments MA LLC providing, inter alia, for the issuance of that certain Senior Secured Convertible Note due 2028, with an initial stated aggregate principal amount of $74,000,000.
“Security Agreements” means those certain amended and restated security agreements, each dated as of the Issue Date, by and among the Company, certain Subsidiaries of the Company and the Collateral Agent.
“Security Document” has the meaning set forth in the Security Agreements.
“Share Delivery Date” any () Partial Redemption Stock Payment Delivery Date, or () Conversion Settlement Date.
“Significant Subsidiary” means, with respect to any Person, any Subsidiary of such Person that constitutes a “significant subsidiary” (as defined in Rule 1-02(w) of Regulation S-X under the Exchange Act) of such Person.
“Spin-Off” has the meaning set forth in Section 7(G)(i)(3)(b).
“Spin-Off Valuation Period” has the meaning set forth in Section 7(G)(i)(3)(b).
“Stock Payment Determination Date” means () with respect to a Partial Redemption Payment in shares of Common Stock, the related Partial Redemption Stock Payment Date and () with respect to the delivery of Conversion Consideration, the related Conversion Date.
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“Subordinated Indebtedness” means Indebtedness subordinated to the Notes pursuant to a written agreement between the Required Holders and the applicable lender in amounts and on terms and conditions satisfactory to the Required Holders in their sole discretion.
“Subsidiary” means, with respect to any Person, () any corporation, association or other business entity (other than a partnership or limited liability company) of which more than fifty percent (50%) of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency, but after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees, as applicable, of such corporation, association or other business entity is owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person; and () any partnership or limited liability company where () more than fifty percent (50%) of the capital accounts, distribution rights, equity and voting interests, or of the general and limited partnership interests, as applicable, of such partnership or limited liability company are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person, whether in the form of membership, general, special or limited partnership or limited liability company interests or otherwise; and () such Person or any one or more of the other Subsidiaries of such Person is a controlling general partner of, or otherwise controls, such partnership or limited liability company.
“Subsidiary Guaranty” means that certain Amended and Restated Guaranty Agreement, dated as of the Issue Date, by and among the Company, certain Subsidiaries of the Company and the Collateral Agent.
“Successor Corporation” has the meaning set forth in Section 9(A).
“Successor Person” has the meaning set forth in Section 7(I)(i).
“SurfOS” means the Company’s and its Subsidiaries’ current and future right, title and interest in and to the SaaS/AI software platform solution and any current and future related contracts, products, services and materials for the advanced air mobility industry (including, without limitation, urban and regional and commercial air transportation companies, OEMs, operators, leasing companies, maintenance services, charging networks, and other entities in the ecosystem), and all Intellectual Property (as defined in the Security Agreement) in any of the foregoing or related thereto.
“Tender/Exchange Offer Valuation Period” has the meaning set forth in Section 7(G)(i)(5).
“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration, now owned or hereafter acquired by the Company or in which the Company now holds or hereafter acquires any interest.
“Trademarks” means all trademarks (registered, common law or otherwise) and any applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof.
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“Trading Day” means any day on which () trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal, in terms of volume, Eligible Exchange on which the Common Stock is listed for trading; and () there is no Market Disruption Event, provided that the Holder, by written notice to the Company, may waive any such Market Disruption Event. If the Common Stock is not so listed or traded, then “Trading Day” means a Business Day.
“Transaction Documents” has the meaning set forth in the Securities Purchase Agreement.
“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of New York.
“Undelivered Shares” has the meaning set forth in Section 7(E)(v).
“Volume Redemption Period” means () for the Partial Redemption Date occurring on the Issue Date, the period beginning on and including the date that the transactions pursuant to the Omnibus Amendment are publicly announced up to and including July 31, 2026 and () for all other Partial Redemption Dates, the period beginning on and including such Partial Redemption Date up to and including the day immediately preceding the next subsequent Partial Redemption Date.
“VWAP Market Disruption Event” means, with respect to any date, () the failure by the principal U.S. national or regional securities exchange on which the Common Stock is then listed, or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, the principal, in terms of volume, Eligible Exchange on which the Common Stock is then traded, to open for trading during its regular trading session on such date; or () the occurrence or existence, for more than one half hour period in the aggregate, of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock, and such suspension or limitation occurs or exists at any time before 1:00 p.m., New York City time, on such date.
“VWAP Trading Day” means a day on which () there is no VWAP Market Disruption Event; provided that the Holder, by written notice to the Company, may waive any such VWAP Market Disruption Event; and () trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal, in terms of volume, Eligible Exchange on which the Common Stock is then traded. If the Common Stock is not so listed or traded, then “VWAP Trading Day” means a Business Day.
“Wholly Owned Subsidiary” of a Person means any Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) are owned by such Person or one or more Wholly Owned Subsidiaries of such Person.
“Withheld Shares” has the meaning set forth in Section 7(J)(ii).
Section . Persons Deemed Owners.
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The Holder of this Note will be treated as the owner of this Note for all purposes.
Section . Registered Form.
This Note, and any Note issued in exchange therefor or in substitution thereof, will be in registered form, without coupons.
Section . Partial Redemption Payments; Maturity Date Payment; Cash Sweep Payments.
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Section . Method of Payment; When Payment Date is Not a Business Day.
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Section . Required Repurchase of Note upon a Fundamental Change.
Section . Conversion.
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To exercise such right, the Holder must deliver notice of such exercise to the Company, specifying whether the Holder has elected clause (1) or (2) above to apply. If the Holder has elected clause (1) to apply, then the Company’s obligation to deliver the Undelivered Shares in accordance with this Note will be deemed to have been satisfied and discharged to the extent the Company has paid the Covering Price in accordance with clause (1). Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock as required pursuant to the terms hereof. In addition to the foregoing, if the Company fails for any reason to deliver Common Stock to the Holder by the applicable Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each one thousand dollars ($1,000) of Undelivered Shares (based on the Daily VWAP on the applicable Share Delivery Date), ten dollars ($10) per Trading Day through the earlier of (x) the fifth (5th) Trading Day after such liquidated damages begin to accrue and (y) the date that the cash amount set forth in Section 7(E)(v)(1) is paid to the Holder or the shares of Common Stock are delivered to the Holder pursuant to Section 7(E)(v)(2).
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where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution, or immediately before the Open of Business on the effective date of such stock split or stock combination, as applicable;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date or the Open of Business on such effective date, as applicable;
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OS0 = the number of shares of Common Stock outstanding immediately before the Open of Business on such Ex-Dividend Date or effective date, as applicable, without giving effect to such dividend, distribution, stock split or stock combination; and
OS1 = the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, stock split or stock combination.
If any dividend, distribution, stock split or stock combination of the type described in this Section 7(G)(i)(1) is declared or announced, but not so paid or made, then the Conversion Rate will be readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution or to effect such stock split or stock combination, to the Conversion Rate that would then be in effect had such dividend, distribution, stock split or stock combination not been declared or announced.
where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such distribution;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
OS = the number of shares of Common Stock outstanding immediately before the Open of Business on such Ex-Dividend Date;
X = the total number of shares of Common Stock issuable pursuant to such rights, Options or warrants; and
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Y = a number of shares of Common Stock obtained by dividing (x) the aggregate price payable to exercise such rights, Options or warrants by (y) the average of the Last Reported Sale Price per share of Common Stock during the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date such distribution is announced.
For purposes of this Section 7(G)(i)(2), in determining whether any rights, Options or warrants entitle holders of Common Stock to subscribe for or purchase shares of Common Stock at a price per share that is less than the average of the Last Reported Sale Price per share of Common Stock during the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date the distribution of such rights, Options or warrants is announced, and in determining the aggregate price payable to exercise such rights, Options or warrants, there will be taken into account any consideration the Company receives for such rights, Options or warrants and any amount payable on exercise thereof, with the value of such consideration, if not cash, to be determined by the Board of Directors in good faith.
then the Conversion Rate will be increased based on the following formula:
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where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such distribution;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
SP = the average of the Last Reported Sale Prices per share of Common Stock during the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before such Ex-Dividend Date; and
FMV = the fair market value (as determined by the Board of Directors in good faith), as of such Ex-Dividend Date, of the shares of Capital Stock, evidences of indebtedness, assets, property, rights, Options or warrants distributed per share of Common Stock pursuant to such distribution;
provided, however, that if FMV is equal to or greater than SP, then, in lieu of the foregoing adjustment to the Conversion Rate, the Holder will receive, for each $1,000 Principal Amount of this Note held by this Holder on the record date for such distribution, at the same time and on the same terms as holders of Common Stock, the amount and kind of shares of Capital Stock, evidences of indebtedness, assets, property, rights, Options or warrants that such Holder would have received if such Holder had owned, on such record date, a number of shares of Common Stock equal to the Conversion Rate in effect on such record date.
where:
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CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such Spin-Off;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
FMV = the product of (x) the average of the Last Reported Sale Prices per share or unit of the Capital Stock or equity interests distributed in such Spin-Off over the ten (10) consecutive Trading Day period (the “Spin-Off Valuation Period”) beginning on, and including, such Ex-Dividend Date (such average to be determined as if references to Common Stock in the definitions of Last Reported Sale Price, Trading Day and Market Disruption Event were instead references to such Capital Stock or equity interests); and (y) the number of shares or units of such Capital Stock or equity interests distributed per share of Common Stock in such Spin-Off; and
SP = the average of the Last Reported Sale Prices per share of Common Stock for each Trading Day in the Spin-Off Valuation Period.
The adjustment to the Conversion Rate pursuant to this Section 7(G)(i)(3)(b) will be calculated as of the Close of Business on the last Trading Day of the Spin-Off Valuation Period but will be given effect immediately after the Open of Business on the Ex-Dividend Date for the Spin-Off, with retroactive effect. If a Note is converted and the Conversion Date occurs during the Spin-Off Valuation Period, then, notwithstanding anything to the contrary in this Note, the Company will, if necessary, delay the settlement of such conversion until the first (1st) Business Day after the last day of the Spin-Off Valuation Period on which the Common Stock is traded.
where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution;
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CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
SP = the Last Reported Sale Price per share of Common Stock on the Trading Day immediately before such Ex-Dividend Date; and
D = the cash amount distributed per share of Common Stock in such dividend or distribution;
provided, however, that if D is equal to or greater than SP, then, in lieu of the foregoing adjustment to the Conversion Rate, the Holder will receive, for each $1,000 Principal Amount of this Note held by the Holder on the record date for such dividend or distribution, at the same time and on the same terms as holders of Common Stock, the amount of cash that such Holder would have received if such Holder had owned, on such record date, a number of shares of Common Stock equal to the Conversion Rate in effect on such record date.
where:
CR0 = the Conversion Rate in effect immediately before the time (the “Expiration Time”) such tender or exchange offer expires;
CR1 = the Conversion Rate in effect immediately after the Expiration Time;
AC = the aggregate value (determined as of the Expiration Time by the Board of Directors in good faith) of all cash and other consideration paid for shares of Common Stock purchased or exchanged in such tender or exchange offer;
OS0 = the number of shares of Common Stock outstanding immediately before the Expiration Time (including all
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shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);
OS1 = the number of shares of Common Stock outstanding immediately after the Expiration Time (excluding all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and
SP = the average of the Last Reported Sale Prices per share of Common Stock over the ten (10) consecutive Trading Day period (the “Tender/Exchange Offer Valuation Period”) beginning on, and including, the Trading Day immediately after the Expiration Date;
provided, however, that the Conversion Rate will in no event be adjusted down pursuant to this Section 7(G)(i)(5), except to the extent provided in the immediately following paragraph. The adjustment to the Conversion Rate pursuant to this Section 7(G)(i)(5) will be calculated as of the Close of Business on the last Trading Day of the Tender/Exchange Offer Valuation Period but will be given effect immediately after the Expiration Time, with retroactive effect. If a Note is converted and the Conversion Date occurs on the Expiration Date or during the Tender/Exchange Offer Valuation Period, then, notwithstanding anything to the contrary in this Note, the Company will, if necessary, delay the settlement of such conversion until the first (1st) Business Day after the last day of the Tender/Exchange Offer Valuation Period.
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then, solely for purposes of such conversion, the Company will, without duplication, give effect to such adjustment on such Conversion Date. In such case, if the date on which the Company is otherwise required to deliver the consideration due upon such conversion is before the first date on which the amount of such adjustment can be determined, then the Company will delay the settlement of such conversion until the first (1st) Business Day after such first date.
then
(x) such Conversion Rate adjustment will not be given effect for such conversion;
(y) the shares of Common Stock issuable upon such conversion based on such unadjusted Conversion Rate will not be entitled to participate in such dividend or distribution; and
(z) there will be added, to the Conversion Consideration otherwise due upon such conversion, the same kind and amount of consideration that would have been delivered in such dividend or distribution with respect to such shares of Common Stock had such shares been entitled to participate in such dividend or distribution.
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and, in each case, as a result of such occurrence, the Common Stock is converted into, or is exchanged for, or represents solely the right to receive, other securities or other property (including cash or any combination of the foregoing) (such an event, a “Common Stock Change Event,” and such other securities or other property, the “Reference Property,” and the amount and kind of Reference Property that a holder of one (1) share of Common Stock would be entitled to receive on account of such Common Stock Change Event (without giving effect to any arrangement not to issue fractional shares of securities or other property), a “Reference Property Unit”), then, notwithstanding anything to the contrary in this Note, at the effective time of such Common Stock Change Event, (x) the Conversion Consideration due pursuant to any Note will be determined in the same manner as if each reference to any number of shares of Common Stock in this Section 7 (or in any related definitions) were instead a reference to the same number of Reference Property Units; (y) for purposes of Section 7(A), each reference to any number of shares of Common Stock in such Section (or in any related definitions) will instead be deemed to be a reference to the same number of Reference Property Units; and (z) for purposes of the definition of “Fundamental Change,” the term “ Common Stock” and “common equity” will be deemed to mean the common equity, if any, forming part of such Reference Property. For these
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purposes, () the Daily VWAP of any Reference Property Unit or portion thereof that consists of a class of common equity securities will be determined by reference to the definition of “Daily VWAP,” substituting, if applicable, the Bloomberg page for such class of securities in such definition; and () the Daily VWAP of any Reference Property Unit or portion thereof that does not consist of a class of common equity securities, and the Last Reported Sale Price of any Reference Property Unit or portion thereof that does not consist of a class of securities, will be the fair value of such Reference Property Unit or portion thereof, as applicable, determined in good faith by the Company (or, in the case of cash denominated in U.S. dollars, the face amount thereof).
If the Reference Property consists of more than a single type of consideration to be determined based in part upon any form of stockholder election, then the composition of the Reference Property Unit will be deemed to be the weighted average of the types and amounts of consideration actually received, per share of Common Stock, by the holders of Common Stock. The Company will notify the Holder of such weighted average as soon as practicable after such determination is made.
At or before the effective date of such Common Stock Change Event, the Company and the resulting, surviving or transferee Person (if not the Company) of such Common Stock Change Event (the “Successor Person”) will execute and deliver such instruments or agreements that (x) provides for subsequent conversions of this Note in the manner set forth in this Section 7(I); (y) provides for subsequent adjustments to the Conversion Rate pursuant to Section 7(G) or Section 7(H) in a manner consistent with this Section 7(I); and (z) contains such other provisions as the Company reasonably determines are appropriate to preserve the economic interests of the Holder and to give effect to the provisions of this Section 7(I). If the Reference Property includes shares of stock or other securities or assets of a Person other than the Successor Person, then such other Person will also execute such instruments or agreements and such instruments or agreements will contain such additional provisions the Company reasonably determines are appropriate to preserve the economic interests of the Holder.
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Section . AFFIRMATIVE AND NEGATIVE COVENANTS.
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provided, however, that the Company need not preserve or keep in full force and effect any such rights (charter and statutory), license or franchise or existence of any of its Subsidiaries if the Board of Directors determines in good faith that (x) the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole; and (y) the loss thereof is not, individually or in the aggregate, materially adverse to the Holder.
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Section . SUCCESSORS.
The Company will not consolidate with or merge with or into, or (directly, or indirectly through one or more of its Subsidiaries) sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to another Person, other than the Holder or any of its Affiliates (a “Business Combination Event”), unless:
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At the effective time of any Business Combination Event, the Successor Corporation (if not the Company) will succeed to, and may exercise every right and power of, the Company under the Transaction Documents with the same effect as if such Successor Corporation had been named as the Company in the Transaction Documents, and, except in the case of a lease, the predecessor Company will be discharged from its obligations under this Note.
Section . DEFAULTS AND REMEDIES.
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and, in each case under this Section 10(A)(xx), such order or decree remains unstayed and in effect for at least thirty (30) days; or
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Section . RANKING.
All payments due under this Note shall rank pari passu in right of payment with all senior secured indebtedness of the Company (including the New Term Note) and senior to any Subordinated Indebtedness in right of payment.
Section . REPLACEMENT NOTES.
If the Holder of this Note claims that this Note has been mutilated, lost, destroyed or wrongfully taken, then the Company will issue, execute and deliver a replacement Note upon surrender to the Company of such mutilated Note, or upon delivery to the Company of evidence of such loss, destruction or wrongful taking reasonably satisfactory to the Company. In the case of a lost, destroyed or wrongfully taken Note, the Company may require the Holder to provide such security or an indemnity that is reasonably satisfactory to the Company to protect the Company from any loss that it may suffer if this Note is replaced.
Section . NOTICES.
Any notice or communication to the Company or Park Lane will be deemed to have been duly given if in writing and delivered in person or by first class mail (registered or certified, return receipt requested), electronic transmission (including e-mail) or other similar means of unsecured electronic communication or overnight air courier guaranteeing next day delivery, or to the other’s address, which initially is as follows:
Surf Air Mobility Inc.
5080 Spectrum Drive, Suite 200
Addison, TX 75001
Attention: Deanna White, Chief Executive Officer
Email address: [email protected]
With copies to:
Surf Air Mobility Inc.
12111 Crenshaw Boulevard
Hawthorne, CA 90250
Attention: General Counsel
Email address: [email protected]
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Sullivan & Worcester LLP
1251 Avenue of the Americas, 19th Floor
New York, NY 10020
Attention: Ron Ben-Bassat
Email Address: [email protected]
Park Lane Investments LLC
53 Greenwich Ave, 2nd Floor
Greenwich, CT 08630
Attention: James Holland; Michael Barker
Email: [email protected];
With copies to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
Attention: Yair Galil
Email address: [email protected]
The Company, by notice to the Holder, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to the Holder will be by e-mail to its e-mail address, which initially is as set forth in the Securities Purchase Agreement. The Holder, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.
If a notice or communication is mailed in the manner provided above within the time prescribed, it will be deemed to have been duly given, whether or not the addressee receives it.
Section . SUCCESSORS AND ASSIGNS.
All agreements of the Company in this Note will bind its successors and will inure to the benefit of the Holder’s successors and assigns. Notwithstanding the foregoing, the Holder shall not assign or transfer this Note, or any of the Holder’s rights hereunder, to any Person, other than to the Holder’s Affiliates, unless an Event of Default shall have occurred and be continuing, and any purported assignment or transfer in contravention of the foregoing shall be void and of no effect, and Park Lane is a third party beneficiary of the foregoing restrictions.
Section . SEVERABILITY.
If any provision of this Note is invalid, illegal or unenforceable, then the validity, legality and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.
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Section . HEADINGS, ETC.
The headings of the Sections of this Note have been inserted for convenience of reference only, are not to be considered a part of this Note and will in no way modify or restrict any of the terms or provisions of this Note.
Section . AMENDMENTS.
Other than Section 7(J)(i) and this Section 17, which may not be modified, amended or waived, this Note may not be amended or modified unless in writing by the Company and the Required Holders (and, in the case of any provision (x) of which Park Lane is an explicit third party beneficiary, or (y) which requires notice to, or provides for consent by, Park Lane, or (z) which directly relates to draws on, issuance or modification of, renewal or replacement of, or conformity with this Note of, the Closing Date Letter of Credit, in each case, by Park Lane), and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.
Section . GOVERNING LAW; WAIVER OF JURY TRIAL.
All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company and each Holder hereby irrevocably submits to the exclusive jurisdiction of any U.S. Federal Court with applicable subject matter jurisdiction sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such Holder or to enforce a judgment or other court ruling in favor of such Holder. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
Section . SUBMISSION TO JURISDICTION.
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The Company () agrees that any suit, action or proceeding against it arising out of or relating to this Note may be instituted in any U.S. Federal Court with applicable subject matter jurisdiction sitting in the City of New York, Borough of Manhattan; () waives, to the fullest extent permitted by applicable law, () any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding; and () any claim that it may now or hereafter have that any such suit, action or proceeding in such a court has been brought in an inconvenient forum; and () submits to the nonexclusive jurisdiction of such court in any such suit, action or proceeding.
Section . ENFORCEMENT FEES.
The Company agrees to pay all costs and expenses of the Holder incurred as a result of enforcement of this Note and the collection of any amounts owed to the Holder hereunder (whether in cash, Common Stock or otherwise), including, without limitation, reasonable and documented attorneys’ fees and expenses.
Section . ELECTRONIC EXECUTION.
The words “execution,” “signed,” “signature,” and words of similar import in this Note shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.C. §§ 7001-7006), the Electronic Signatures and Records Act of 1999 (N.Y. State Tech. §§ 301-309), or any other similar state laws based on the Uniform Electronic Transactions Act.
Section . LETTER OF CREDIT ASSIGNABILITY.
The Collateral Agent hereby covenants and agrees, for the express benefit of Park Lane (who shall be a third party beneficiary of this Section 22), that, unless an Event of Default shall have occurred and be continuing, it shall not assign the Closing Date Letter of Credit or any substitute Letter of Credit, or any of its rights thereunder as the beneficiary, to any Person other than to the Collateral Agent’s Affiliates.
* * *
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Exhibit A
Form of Holder Conversion Notice
SURF AIR MOBILITY INC.
Senior Secured Convertible Note due 2027
Subject to the terms of the above referenced note (the “Note”), by executing and delivering this Holder Conversion Notice, the undersigned Holder of the Note directs the Company to convert the following Principal Amount of the Note: $ ,000 in accordance with the following details.
Delivery Instructions: (Insert, as applicable, DTC participant number for delivery of Common Stock through the book entry-facilities of DTC, or name in which shares of Common Stock are to be delivered).
Box A ☐ If the Note bears a restricted legend and unrestricted shares are to be delivered: The undersigned Holder certifies that it will sell the shares to be delivered pursuant to () an effective registration statement or () Rule 144 under the Securities Act.
Box B ☐ If restricted shares are to be delivered, the Holder certifies that it has made arrangements with the transfer agent to receive such shares in its name.
Shares of Common Stock to be delivered:
Accrued interest amount:
Account Number:
DTC Participant Number:
DTC Participant Name:
Date:
(Legal Name of Holder)
By: Name:
Title:
2
Exhibit B
Form of Company Conversion Notice
SURF AIR MOBILITY INC.
Senior Secured Convertible Notes due 2027
By executing and delivering this Company Conversion Notice, the Company hereby notifies the Holder of the above referenced note (the “Note”) of the Company’s election to convert the entire principal amount of the Note identified by Certificate No. .
Delivery Instructions:
Box A ☐ Unrestricted shares are to be delivered. Box B ☐ Restricted shares are to be delivered.
By delivering this Company Conversion Notice, the Company hereby represents and warrants that the Forced Conversion Equity Conditions have been satisfied as of the date hereof.
SURF AIR MOBILITY INC.
Date: By:
Name:
Title:
Exhibit C
Form of Covenant Compliance Certification
The undersigned, the duly qualified and elected Chief Financial Officer of SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), does hereby certify in such capacity and on behalf of the Company, pursuant to the Senior Secured Convertible Note due 2027, issued July 1, 2026 (the “Note”), issued by the Company to High Trail Special Situations LLC, that:
Capitalized terms used herein without definition shall have the meanings given to such terms in the Note.
SURF AIR MOBILITY INC. |
By: |
Name: |
Title: |
Date: __________________
Exhibit 10.3
SURF AIR MOBILITY INC.
Senior Secured Term Note due 2028
Certificate No. 1
SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), for value received, promises to pay to HIGH TRAIL SPECIAL SITUATIONS LLC (the “Initial Holder”), or its registered assigns, one hundred percent (100%) of the principal sum of thirty million dollars ($30,000,000) (such principal sum, the “Principal Amount”) on January 1, 2028, and to pay any outstanding interest thereon, as provided in this Note, in each case, as provided in and subject to the other provisions of this Note, including the earlier redemption or repurchase of this Note.
Unless otherwise indicated, references herein to “dollars” or “$” are to U.S. dollars.
Additional provisions of this Note are set forth on the other side of this Note.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, Surf Air Mobility Inc. has caused this instrument to be duly executed as of the date set forth below.
SURF AIR MOBILITY INC.
Date: July 1, 2026 By:
Name:
Title:
(Signature Page to Senior Secured Term Note due 2028, Certificate No. 1)
SURF AIR MOBILITY INC.
Senior Secured Term Note due 2028
This Note (this “Note” and, collectively with any Note issued in exchange therefor or in substitution thereof, the “Notes”) is issued by SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), and designated as its “Senior Secured Term Notes due 2028”.
Section . Definitions.
“Affiliate” has the meaning set forth in Rule 144 under the Securities Act.
“ATM Sales Agreement” has the meaning set forth in Section 8(X).
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“Cash Sweep Amount” means, with respect to all Cash Sweep Dispositions, fifty percent (50%) of the gross cash or cash equivalents proceeds to the Company from all such Cash Sweep Dispositions.
“Cash Sweep Certification” has the meaning set forth in Section 4(D)(ii).
“Cash Sweep Dispositions” means any Disposition of the Electrification Assets or the SurfOS assets (including any corresponding Dispositions of Equity Interests in Surf Air Technologies Inc.), so long as any of the consideration received by the Company or any of its Subsidiaries in connection with such Disposition is cash or cash equivalents.
“Cash Sweep Financing” means all Cash Sweep Dispositions.
“Cash Sweep Notice” has the meaning set forth in Section 4(D)(iii).
“Cash Sweep Payment” has the meaning set forth in Section 4(D)(i).
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in the case of each of clauses (A), (B) and (C), at any point prior to the one hundred eighty-first (181st) day after the Maturity Date.
4
“Equity Interest” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including preferred stock or membership interests (however designated, whether voting or non-voting), of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) and including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the Securities Act), and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership.
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For purposes of this definition, (x) any transaction or event described in both clause (A) and in clause (B) above (without regard to the proviso in clause (B)) will be deemed to occur solely pursuant to clause (B) above (subject to such proviso); and (y) whether a Person is a “beneficial owner” and whether shares are “beneficially owned” will be determined in accordance with Rule 13d-3 under the Exchange Act.
“Fundamental Change Repurchase Date” means the date as of which this Note must be repurchased for cash in connection with a Fundamental Change, as provided in Section 6(B).
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8
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“Permitted Intellectual Property Licenses” means () Intellectual Property licenses actually disclosed pursuant to the Omnibus Amendment as of the date of the Omnibus Amendment, () non-perpetual Intellectual Property licenses granted in the ordinary course of
11
business on arm’s length terms consisting of the licensing of technology, the development of technology or the providing of technical support which may include licenses with unlimited renewal options solely to the extent such options require mutual consent for renewal or are subject to financial or other conditions as to the ability of licensee to perform under the license; provided such license was not entered into during an Event of Default or continuance of a Default and () licenses granted in connection with the Palantir Agreements or any SurfOS assets.
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13
14
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“SurfOS” means the Company’s and its Subsidiaries’ current and future right, title and interest in and to the SaaS/AI software platform solution and any current and future related contracts, products, services and materials for the advanced air mobility industry (including, without limitation, urban and regional and commercial air transportation companies, OEMs, operators, leasing companies, maintenance services, charging networks, and other entities in the ecosystem), and all Intellectual Property (as defined in the Security Agreement) in any of the foregoing or related thereto.
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Section . Persons Deemed Owners.
The Holder of this Note will be treated as the owner of this Note for all purposes.
Section . Registered Form.
This Note, and any Note issued in exchange therefor or in substitution thereof, will be in registered form, without coupons.
Section . Partial Redemption Payments; Maturity Date Payment; Cash Sweep Payments; Company Redemption Election.
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Section . Method of Payment; When Payment Date is Not a Business Day.
18
Section . Required Repurchase of Note upon a Fundamental Change.
Section . [Reserved.]
Section . Affirmative and Negative Covenants.
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provided, however, that the Company need not preserve or keep in full force and effect any such rights (charter and statutory), license or franchise or existence of any of its Subsidiaries if the Board of Directors determines in good faith that (x) the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole; and (y) the loss thereof is not, individually or in the aggregate, materially adverse to the Holder.
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Section . Successors.
The Company will not consolidate with or merge with or into, or (directly, or indirectly through one or more of its Subsidiaries) sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to another Person, other than the Holder or any of its Affiliates (a “Business Combination Event”), unless:
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At the effective time of any Business Combination Event, the Successor Corporation (if not the Company) will succeed to, and may exercise every right and power of, the Company under the Transaction Documents with the same effect as if such Successor Corporation had been named as the Company in the Transaction Documents, and, except in the case of a lease, the predecessor Company will be discharged from its obligations under this Note.
Section . Defaults and Remedies.
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and, in each case under this Section 10(A)(xx), such order or decree remains unstayed and in effect for at least thirty (30) days; or
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Section . Ranking.
All payments due under this Note shall rank pari passu in right of payment with all senior secured indebtedness of the Company (including the New Convertible Note) and senior to any Subordinated Indebtedness in right of payment.
Section . Replacement Notes.
If the Holder of this Note claims that this Note has been mutilated, lost, destroyed or wrongfully taken, then the Company will issue, execute and deliver a replacement Note upon surrender to the Company of such mutilated Note, or upon delivery to the Company of evidence of such loss, destruction or wrongful taking reasonably satisfactory to the Company. In the case of a lost, destroyed or wrongfully taken Note, the Company may require the Holder to provide such security or an indemnity that is reasonably satisfactory to the Company to protect the Company from any loss that it may suffer if this Note is replaced.
Section . Notices.
Any notice or communication to the Company or Park Lane will be deemed to have been duly given if in writing and delivered in person or by first class mail (registered or certified, return receipt requested), electronic transmission (including e-mail) or other similar means of unsecured electronic communication or overnight air courier guaranteeing next day delivery, or to the other’s address, which initially is as follows:
Surf Air Mobility Inc.
5080 Spectrum Drive, Suite 200
Addison, TX 75001
Attention: Deanna White, Chief Executive Officer
Email address: [email protected]
With copies to:
Surf Air Mobility Inc.
12111 Crenshaw Boulevard
Hawthorne, CA 90250
Attention: General Counsel
Email address: [email protected]
Sullivan & Worcester LLP
1251 Avenue of the Americas, 19th Floor
New York, NY 10020
Attention: Ron Ben-Bassat
Email Address: [email protected]
Park Lane Investments LLC
53 Greenwich Ave, 2nd Floor
Greenwich, CT 08630
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Attention: James Holland; Michael Barker
Email: [email protected];
With copies to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
Attention: Yair Galil
Email address: [email protected]
The Company, by notice to the Holder, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to the Holder will be by e-mail to its e-mail address, which initially is as set forth in the Securities Purchase Agreement. The Holder, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.
If a notice or communication is mailed in the manner provided above within the time prescribed, it will be deemed to have been duly given, whether or not the addressee receives it.
Section . Successors and Assigns.
All agreements of the Company in this Note will bind its successors and will inure to the benefit of the Holder’s successors and assigns. Notwithstanding the foregoing, the Holder shall not assign or transfer this Note, or any of the Holder’s rights hereunder, to any Person, other than to the Holder’s Affiliates, unless an Event of Default shall have occurred and be continuing, and any purported assignment or transfer in contravention of the foregoing shall be void and of no effect, and Park Lane is a third party beneficiary of the foregoing restrictions.
Section . Severability.
If any provision of this Note is invalid, illegal or unenforceable, then the validity, legality and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.
Section . Headings, Etc.
The headings of the Sections of this Note have been inserted for convenience of reference only, are not to be considered a part of this Note and will in no way modify or restrict any of the terms or provisions of this Note.
Section . Amendments.
Other than this Section 17, which may not be modified, amended or waived, this Note may not be amended or modified unless in writing by the Company and the Required Holders (and, in
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the case of any provision (x) of which Park Lane is an explicit third party beneficiary, or (y) which requires notice to, or provides for consent by, Park Lane, or (z) which directly relates to draws on, issuance or modification of, renewal or replacement of, or conformity with this Note of, the Closing Date Letter of Credit, in each case, by Park Lane), and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.
Section . Governing Law; Waiver of Jury Trial.
All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company and each Holder hereby irrevocably submits to the exclusive jurisdiction of any U.S. Federal Court with applicable subject matter jurisdiction sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such Holder or to enforce a judgment or other court ruling in favor of such Holder. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
Section . Submission to Jurisdiction.
The Company () agrees that any suit, action or proceeding against it arising out of or relating to this Note may be instituted in any U.S. Federal Court with applicable subject matter jurisdiction sitting in the City of New York, Borough of Manhattan; () waives, to the fullest extent permitted by applicable law, () any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding; and () any claim that it may now or hereafter have that any such suit, action or proceeding in such a court has been brought in an inconvenient forum; and () submits to the nonexclusive jurisdiction of such court in any such suit, action or proceeding.
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Section . Enforcement Fees.
The Company agrees to pay all costs and expenses of the Holder incurred as a result of enforcement of this Note and the collection of any amounts owed to the Holder hereunder (whether in cash, Common Stock or otherwise), including, without limitation, reasonable and documented attorneys’ fees and expenses.
Section . Electronic Execution.
The words “execution,” “signed,” “signature,” and words of similar import in this Note shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.C. §§ 7001-7006), the Electronic Signatures and Records Act of 1999 (N.Y. State Tech. §§ 301-309), or any other similar state laws based on the Uniform Electronic Transactions Act.
Section . Letter of Credit Assignability.
The Collateral Agent hereby covenants and agrees, for the express benefit of Park Lane (who shall be a third party beneficiary of this Section 22), that, unless an Event of Default shall have occurred and be continuing, it shall not assign the Closing Date Letter of Credit or any substitute Letter of Credit, or any of its rights thereunder as the beneficiary, to any Person other than to the Collateral Agent’s Affiliates.
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Exhibit A
Form of Covenant Compliance Certification
The undersigned, the duly qualified and elected Chief Financial Officer of SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), does hereby certify in such capacity and on behalf of the Company, pursuant to the Senior Secured Term Note due 2028, issued July 1, 2026 (the “Note”), issued by the Company to High Trail Special Situations LLC, that:
Capitalized terms used herein without definition shall have the meanings given to such terms in the Note.
SURF AIR MOBILITY INC. |
By: |
Name: |
Title: |
Date: __________________
Exhibit 10.4
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as of June 30, 2026, by and among Surf Air Mobility Inc., a Delaware corporation (the “Company”), Southern Airways Pacific, LLC and Southern Airways Express, LLC, each a Delaware limited liability company (individually and collectively, as the context requires, the “Subsidiaries”), each buyer identified on the signature pages hereto (each, including its successors and assigns, a “Buyer” and collectively, the “Buyers”), and JGB Collateral LLC, a Delaware limited liability company, as Collateral Agent.
WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to issue and sell to each Buyer, and each Buyer, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Buyer agree as follows:
DEFINITIONS
“Action” shall have the meaning assigned to such term in Section 3.1(j).
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Aircraft” shall have the meaning assigned to such term in the Debenture.
“Aircraft Mortgage” means the Aircraft Mortgage and Security Agreement, dated as of June 30, 2026, by and among one or more Subsidiaries of the Company, pursuant to which the obligations of such Subsidiaries under the Debentures are secured by each Aircraft.
“Baker Donelson” means Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, with offices located at 2235 Gateway Access Point, Suite 220, Raleigh, NC 27607.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.
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“Buyer Party” shall have the meaning assigned to such term in Section 4.9.
“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date” means the Trading Day on which all of the Transaction Documents referred to in Section 2.2 have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Buyers’ obligations to pay the Subscription Amount, and (ii) the Company’s obligations to deliver the Debentures and Warrants have been satisfied or waived.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral Agent” shall have the meaning assigned to such term in Section 4.13.
“Commission” means the Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company Counsel” means Sullivan & Worcester LLP.
“Current Subsidiary” means any Person in which the Company on the date of this Agreement, directly or indirectly, (i) owns a majority of the outstanding issued share capital or other equity or similar interest of such Person or (ii) controls or operates all or a majority of the business, operations or administration of such Person, and all of the foregoing, collectively, “Current Subsidiaries”.
“Debentures” means the Senior Secured Debentures, in substantially the form of Exhibit A, issued by one or more Subsidiaries of the Company to the Buyers hereunder in accordance with the terms hereof, which Debentures shall have an aggregate face amount of $21,600,000, shall accrue interest at 13.5% per annum payable monthly in arrears in cash on the last day of each month, shall mature on June 30, 2031, shall be issued with an original issue discount of $600,000, shall provide for monthly amortization payments of $220,000 beginning on June 30, 2027 and on the last day of each month thereafter, shall permit prepayment at par without any prepayment premium, repayment premium, make-whole or penalty, shall require mandatory prepayment from aircraft-sale proceeds as set forth therein and herein, and shall otherwise contain the amortization, prepayment and collateral-related terms set forth therein.
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“Disclosure Schedules” means the Disclosure Schedules delivered by the Company concurrently with the execution and delivery of this Agreement.
“Effective Date” means the earliest of the date that (a) the initial Resale Registration Statement has been declared effective by the Commission, (b) all of the Securities have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one year anniversary of the Closing Date provided that a holder of the Securities is not an Affiliate of the Company or (d) all of the Securities may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and counsel to the Company has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Securities pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder.
“Evaluation Date” shall have the meaning assigned to such term in Section 3.1(w).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“GAAP” means the accounting principles generally accepted in the United States applied on a consistent basis during the periods involved.
“Governmental Authority” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.
“Guarantee” means a guarantee executed by the Guarantor in the form attached hereto as Exhibit D.
“Guarantor” means the Company.
“High Trail” means High Trail Capital and/or the applicable holder of the Company’s existing High Trail indebtedness, as the context requires.
“High Trail Consent” means an amendment to the High Trail Note, in form and substance reasonably satisfactory to the Buyers, pursuant to which the High Trail Note is amended to permit the Indebtedness and Liens incurred or granted pursuant to the Debentures and the other Transaction Documents.
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“High Trail Intercreditor Agreement” means any intercreditor, subordination, collateral access, lien priority or similar agreement with High Trail, in form and substance reasonably satisfactory to the Buyers, required to give effect to the priority, non-recourse, subordination and standstill arrangements contemplated by the Transaction Documents.
“HSBC” means HSBC Bank USA, National Association, or such other issuing bank for the Letter of Credit as is acceptable to the Buyers.
“Indebtedness” shall have the meaning assigned to such term in the Debenture.
“JGB Funds” means JGB Capital, L.P., JGB Partners, L.P., JGB Capital Offshore L.P., and their respective Affiliates.
“Intellectual Property Rights” shall have the meaning assigned to such term in Section 3.1(n).
“IT Systems and Data” shall have the meaning assigned to such term in Section 3.1(z).
“Letter of Credit” means an irrevocable standby letter of credit issued by HSBC Bank USA, N.A. for the benefit of the Collateral Agent in an initial amount equal to $14,000,000, less the aggregate amount of any partial draws made thereunder by the Collateral Agent from time to time, as such letter of credit may be replaced from time to time in accordance with the provisions of the Debenture, with an initial term of one year from the date of issuance, subject to automatic successive one-year extensions, and a final expiry date not earlier than December 31, 2031, and otherwise on terms consistent with the draft letter of credit provided to the Collateral Agent prior to the date hereof or otherwise reasonably satisfactory to the Collateral Agent.
“Lien” shall have the meaning assigned to such term in the Debenture.
“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Maximum Rate” shall have the meaning assigned to such term in Section 5.16.
“Money Laundering Laws” shall have the meaning assigned to such term in Section 3.1(w).
“NOLs” shall have the meaning assigned to such term in Section 3.1(t).
“OFAC” shall have the meaning assigned to such term in Section 3.1(w).
“Original Principal Amount” means, as to each Buyer, the face amount of Debentures purchased by such Buyer as set forth below such Buyer’s signature block on the signature pages hereto next to the heading “Original Principal Amount” of Debentures purchased by such Buyer, which shall equal $21,600,000.00 in the aggregate.
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“Permits” means all permits, licenses, registrations, certificates, orders, approvals, authorizations, consents, waivers, franchises, variances and similar rights issued by or obtained from any Governmental Authority.
“Permitted Liens” shall have the meaning assigned to such term in the Debentures.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Press Release” shall have the meaning assigned to such term in Section 4.6.
“Principal Market” means the New York Stock Exchange.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Registration Rights Agreement” means the Registration Rights Agreement, dated on or about the date hereof, among the Company and the Buyers, in the form of Exhibit B attached hereto, with respect to the registration of the Warrant Shares for resale by the Buyers.
“Required Approvals” shall have the meaning assigned to such term in Section 3.1(e).
“Required Holders” means those Buyers or holders owning at least 50.1% of the outstanding principal balance of the Debentures; provided that, so long as any JGB Fund holds any Debentures, such JGB Fund shall be a “Required Holder”.
“Resale Registration Statement” means a resale registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale of the Warrant Shares by each Buyer as provided for in the Registration Rights Agreement.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“SEC Reports” shall have the meaning assigned to such term in Section 3.1(h).
“Securities” means the Warrants and the Warrant Shares.
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“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Security Agreement” means the Security Agreement, dated the date hereof, among the applicable subsidiary of the Company, the Collateral Agent and the Buyers, in the form of Exhibit C attached hereto.
“Security Documents” means the Security Agreement, the Aircraft Mortgage, the Letter of Credit, any control agreements and such other security agreements, security deeds, fixed and floating charges, debentures, assignments and other security instruments that the Collateral Agent reasonably requires to obtain and maintain the liens and security interests contemplated by the Transaction Documents, including liens on the Aircraft.
“Subscription Amount” means, as to each Buyer, the aggregate funded amount to be paid for the Debentures and Warrants purchased hereunder as specified below such Buyer’s name on the signature page of this Agreement and next to the heading “Subscription Amount” in immediately available funds. The aggregate “Subscription Amount” shall be $21,000,000.00.
“Subsidiaries” and “Subsidiary” means, as of any date of determination, collectively, all Current Subsidiaries; provided, however, that in no event shall any joint venture be deemed a Subsidiary for purposes of this Agreement or the other Transaction Documents.
“Trading Day” shall have the meaning assigned such term in the Debentures.
“Transaction Documents” means this Agreement, the Debentures, the Warrants, the Security Agreement, the Aircraft Mortgage, the Letter of Credit, the Guarantee, the Registration Rights Agreement and all exhibits and schedules thereto and hereto and any other documents or agreements executed by the Company in connection with the transactions contemplated hereunder.
“Transfer Agent” means American Stock Transfer & Trust Company, LLC.
“Transfer Agent Instructions” means irrevocable instructions to the Transfer Agent executed by the Company with respect to the issuance of the Warrant Shares and acceptable to the Buyers in form and substance.
“Warrants” means, collectively, the Tranche A Warrants and the Tranche B Warrants delivered to the Buyers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to 5 years. The “Tranche A Warrants” shall be exercisable for up to an aggregate of 710,294 Warrant Shares at an exercise price equal to 135% of the closing price of the Common Stock on the Trading Day immediately prior to the Closing Date. The “Tranche B Warrants” shall be exercisable for up to an aggregate of 617,647 Warrant Shares at an exercise price equal to 180% of the closing price of the Common Stock on the Trading Day immediately prior to the Closing Date.
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“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants (or any replace security pursuant to the terms thereof).
PURCHASE AND SALE
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REPRESENTATIONS AND WARRANTIES
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(f) Access to Information. Buyer acknowledges and agrees that it has had access to such information regarding the Company and the Securities as it has deemed necessary, including the SEC reports, to make an informed investment decision. The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Buyer’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby. The Buyers acknowledge and agree that neither the Company nor any Subsidiary makes or has made any representations or warranties with respect to the transactions contemplated hereby other than such representations and warranties.
OTHER AGREEMENTS OF THE PARTIES
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NEITHER THIS SECURITY NOR, IF THIS SECURITY IS A WARRANT, THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND, IF THIS SECURITY IS A WARRANT, THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Company acknowledges and agrees that a Buyer may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Buyer may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Buyer’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.
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MISCELLANEOUS
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[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
SURF AIR MOBILITY INC.
By:
Name:
Title:
SOUTHERN AIRWAYS PACIFIC, LLC
By:
Name:
Title:
SOUTHERN AIRWAYS EXPRESS, LLC
By:
Name:
Title:
Address for Notice:
Attn:
Fax:
Email:
With a copy (which shall not constitute notice) to:
Attn:
Fax:
Email:
[Remainder of Page Intentionally Left Blank;
Signature Page for Buyer Follows]
[Buyer Signature Pages to Surf Air Mobility Inc. Securities Purchase Agreement]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Buyer: JGB Partners L.P.
Signature of Authorized Signatory of Buyer:
Name of Authorized Signatory: Brett Cohen
Title of Authorized Signatory: President
Email Address of Authorized Signatory: [email protected]
Facsimile Number of Authorized Signatory: 212-253-4093
Address for Notice to Buyer:
c/o JGB Collateral LLC
246 Post Road E
Westport CT 06880
Attn: Brett Cohen, President
Address for Delivery of Securities to Buyer (if not same as address for notice):
Same as address for notice.
Subscription Amount: $16,121,000
Warrant Shares underlying the Tranche A Warrants: 545,269
Warrant Shares underlying the Tranche B Warrants: 474,147
Original Principal Amount of Debentures: $16,581,600
{
[Buyer Signature Pages to Surf Air Mobility Inc. Securities Purchase Agreement]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Buyer: JGB Capital Offshore L.P.
Signature of Authorized Signatory of Buyer:
Name of Authorized Signatory: Brett Cohen
Title of Authorized Signatory: President
Email Address of Authorized Signatory: [email protected]
Facsimile Number of Authorized Signatory: 212-253-4093
Address for Notice to Buyer:
c/o JGB Collateral LLC
246 Post Road E
Westport CT 06880
Attn: Brett Cohen, President
Address for Delivery of Securities to Buyer (if not same as address for notice):
Same as address for notice.
Subscription Amount: $4,469,000
Warrant Shares underlying the Tranche A Warrants: 151,157
Warrant Shares underlying the Tranche B Warrants: 131,441
Original Principal Amount of Debentures: $4,596,686
{
[Buyer Signature Pages to Surf Air Mobility Inc. Securities Purchase Agreement]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Buyer: JGB Capital L.P.
Signature of Authorized Signatory of Buyer:
Name of Authorized Signatory: Brett Cohen
Title of Authorized Signatory: President
Email Address of Authorized Signatory: [email protected]
Facsimile Number of Authorized Signatory: 212-253-4093
Address for Notice to Buyer:
c/o JGB Collateral LLC
246 Post Road E
Westport CT 06880
Attn: Brett Cohen, President
Address for Delivery of Securities to Buyer (if not same as address for notice):
Same as address for notice.
Subscription Amount: $410,000
Warrant Shares underlying the Tranche A Warrants: 13,868
Warrant Shares underlying the Tranche B Warrants: 12,059
Original Principal Amount of Debentures: $421,714
{
[Collateral Agent Signature Page to Surf Air Mobility Inc. Securities Purchase Agreement]
AGREED AND ACCEPTED:
JGB COLLATERAL LLC
By:
Name: Brett Cohen
Title: President
Exhibit 10.5
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS DEBENTURE (DEFINED BELOW) HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY TREASURY REGULATIONS PROMULGATED UNDER SECTION 1275(c) OF THE CODE. PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), CHIEF FINANCIAL OFFICER, A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING NO LATER THAN TEN DAYS AFTER THE ISSUANCE DATE OF THIS DEBENTURE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). CHIEF FINANCIAL OFFICER MAY BE REACHED AT TELEPHONE NUMBER (424) 332-5480.
Original Issue Date: June 30, 2026
$[__________]1
DEBENTURE DUE JUNE 30, 2031
THIS DEBENTURE is one of a series of duly authorized and validly issued Debentures of Southern Airways Pacific, LLC, a Delaware limited liability company, and Southern Airways Express, LLC, a Delaware limited liability company (individually and collectively, as the context requires, the “Company”), having its principal place of business at 12111 S. Crenshaw Blvd., Hawthorne, California 90250, designated as its Debenture due June 30, 2031 (this debenture, the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).
FOR VALUE RECEIVED, the Company promises to pay to [HOLDER] or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $[__________] on June 30, 2031 (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the
1 Pro Rata Portion of $21,600,000.00
aggregate then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture is subject to the following additional provisions:
“Agent” means JGB Collateral, LLC, as collateral agent for the Holders of the Debentures.
“Aircraft” means each aircraft listed on Schedule 1 attached hereto including with respect to each such aircraft, (i) the Airframe, (ii) the Engines, (iii) the APU, and (iv) the Records, and all accessories, additions, accessions, alterations, modifications, Parts (specifically including but not limited to the propellers listed on Schedule 1), repairs and attachments now or hereafter affixed thereto or used in connection therewith, and all Permitted Replacements and all other replacements, substitutions and exchanges (including trade-ins) for any of the foregoing.
“Airframe” means (i) each airframe described in Schedule 1 hereto, and shall not include the Engines or APU, and (ii) any and all related Parts.
“Applicable Aviation Authority” means any nation or government or national or governmental authority of any nation, state, province or other political subdivision thereof, and any agency, department, regulator, airport authority, civil aviation authority, air navigation authority or other Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government in respect of the regulation of
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civil aviation or having jurisdiction over the registration, airworthiness or operation of, or other matters relating to the Aircraft, including, without limitation, the FAA, the United Kingdom Civil Aviation Authority, the Joint Aviation Authorities, an associated body of the European Civil Aviation Conference, or any successor to such organization and the European Aviation Safety Agency, an agency of the European Union, or any successor to such organization.
“Applicable Law” shall mean all applicable laws, statutes, treaties, conventions, judgments, decrees, injunctions, writs and orders of any Governmental Authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority, as amended and revised, and any judicial or administrative interpretation of any of the same, including the airworthiness certificate issued with respect to each Aircraft, the Cape Town Convention, the UCC, the Transportation Code, all TSA regulations, all FARs, airworthiness directives, and/or any of the same relating to the Aircraft generally or to noise, the environment, security, public safety, insurance, taxes and other Impositions, exports or imports or contraband.
“Applicable Standards” means (i) Applicable Law; (ii) the requirements of the Required Coverages; and (iii), with respect to each Airframe (including the Engines, APU or Parts), all compliance requirements set forth in or under (A) all maintenance manuals initially furnished with respect thereto, including any subsequent amendments or supplements to such manuals issued by the manufacturer or supplier thereof from time to time, (B) all mandatory service bulletins issued, supplied, or available by or through the applicable manufacturer with respect thereto, (C) all applicable airworthiness directives issued by the FAA or other Applicable Aviation Authorities, (D) all conditions to the enforcement of any warranties pertaining thereto, and (E) the FAA approved maintenance program with respect to each Aircraft (including, the Airframe, the Engines, APU or Parts).
“APU” means (i) the auxiliary power units described in Schedule 1 hereto, whether or not hereafter installed on the Aircraft or any other airframe from time to time; and (ii) any auxiliary power unit constituting a Permitted Replacement that may from time to time be substituted, pursuant to the applicable terms of this Debenture, for an APU; in each case, together with any and all related Parts.
“Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company or any Subsidiary thereof any such case or proceeding that is not stayed or dismissed within 60 days after commencement, (c) the Company or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any material part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company
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or any Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, (h) the Company or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company (other than by means of exercise of the Securities issued together with the Debentures), (b) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, control over the management or policies of the Company or control over the equity interests of such Person entitled to vote for members of the Board of Directors of the Company on a fully-diluted basis (and taking into account all such voting power that such Person or group has the right to acquire pursuant to any option right) representing 50% or more of the combined voting power of such equity interests, (c) the Company (and all of its Subsidiaries, taken as a whole) sells or transfers all or substantially all of its assets to another Person or (d) a replacement at one time of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the Original Issue Date).
“Common Stock” shall have the meaning assigned to such term in the Purchase Agreement.
“Collateral Account” means a segregated deposit account established and maintained at a financial institution reasonably acceptable to the Agent, in the name of the Agent, into which the L/C Collateral Reserve shall be deposited on the Original Issue Date, to be held and released in accordance with Section 3(d).
“Debenture Register” shall have the meaning set forth in Section 2(b).
“Defective Registration” means any failure to cause an Aircraft to be effectively and validly registered with the Registry in the name of Company or the applicable Subsidiary in accordance with the Registration Requirements, for any reason whatsoever, including should such registration be revoked, canceled or expired or otherwise deemed to have ended or been invalidated pursuant to the Registration Requirements.
“Depository Trust Company” or “DTC” means The Depository Trust Company.
“Disqualified Stock” shall mean, with respect to any person, any equity interests of such person that, by its terms (or by the terms of any security or other equity interests into
4
which it is convertible or for which it is exchangeable) or upon the happening of any event or condition (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Debentures), (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other equity interests that would constitute Disqualified Stock, in each case, prior to the date that is one hundred eighty one (181) days after the Maturity Date.
“Engine” shall mean (i) each of the engines described in Schedule 1 hereto, whether or not hereafter installed on an Airframe or any other airframe from time to time; and (ii) any engine constituting a Permitted Replacement that may from time to time be substituted, pursuant to the applicable terms of this Debenture, for an Engine; in each case, together with any and all related Parts.
“Event of Loss” with respect to an Aircraft, an Airframe, an Engine, or the APU shall mean any of the following events: (i) loss of such property or the use thereof due to theft, disappearance, destruction, damage beyond repair or rendition of such property permanently unfit for normal use for any reason whatsoever; (ii) any damage to such property that results in an insurance settlement with respect to such property on the basis of a total loss or constructive total loss; (iii) the condemnation, confiscation or seizure of, or requisition of title to or use of, such property by the act of any foreign or domestic Governmental Authority (“Requisition of Use”); (iv) as a result of any rule, regulation, order or other action by any foreign or domestic Governmental Authority (including, without limitation, the FAA or any similar foreign Governmental Authority) having jurisdiction, (A) the use of such property shall have been prohibited, or such property shall have been declared unfit for use, (B) Company shall be required to divest itself of its rights, title or interest in such property, or (C) the then actual hour or cycle limits with respect to such property shall equal or exceed any mandatory hour and cycle limits with respect to such property, beyond which it cannot be operated, except for regular maintenance events; (v) with respect to an Engine or the APU, the removal thereof from the Airframe, whether or not such Engine or APU is operational, except for regular maintenance events; or (vi) an Engine or APU is returned to the manufacturer other than for repair or replacement (any such return being herein referred to as a “Return to Manufacturer”). The date of such Event of Loss shall be the date of such theft, disappearance, destruction, damage, Requisition of Use, prohibition, unfitness for use for the stated period, removal for the stated period or Return to Manufacturer.
“Event of Default” shall have the meaning set forth in Section 8(a).
“FAA” means the United States Federal Aviation Administration and/or the Administrator of the Federal Aviation Administration and the Department of Transportation, or any Person or Governmental Authority succeeding the functions of any of the foregoing, including, where applicable, the TSA.
5
“FARs” shall mean the Federal Aviation Regulations and any Special Federal Aviation Regulations (Title 14 C.F.R. Part 1 et seq.), together with all successor regulations thereto.
“Fundamental Transaction” shall have the meaning set forth in Section 5.
“Governmental Authority” shall mean any court, governmental or administrative body, instrumentality, department, bureau, commission, agency or authority.
“IDERA” shall mean the Irrevocable De-Registration and Export Request Authorization, prepared by Agent pursuant to the Protocol, and executed by Company or applicable Subsidiary.
“Indebtedness” of a Person shall include (a) all obligations for borrowed money or the deferred purchase price of property or services including without limitation, merchant cash advances (excluding trade credit and trade accounts payable incurred in the ordinary course of business and which is not past due), (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, surety bonds, bankers acceptances, currency swap agreements, interest rate hedging agreements, interest rate swaps or other financial products, (c) all capital lease obligations (as determined in accordance with GAAP), (d) all obligations or liabilities secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed by such Person, (e) any obligation arising with respect to any other transaction that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheets of such Person, including without limitation, merchant cash advances (excluding trade credit and trade accounts payable incurred in the ordinary course of business), (f) Disqualified Stock, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse) any of the foregoing obligations of any other Person.
“Interest Payment Date” shall have the meaning set forth in Section 2(a).
“Interested Third Party” means any manager, operator, lessee, time share party, service provider or other Person.
“Investments” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition (including by merger) of equity interests of another Person, (b) a loan, advance or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitutes a business unit or all or a substantial part of the business of, such Person.
“Late Fees” shall have the meaning set forth in Section 2(c).
“L/C Availability” means, at any time, an amount equal to (i) $14,000,000, minus (ii) any amounts of any partial draws made under the Letter of Credit from time to time,
6
minus (iii) any Permitted L/C Reduction (for the avoidance of doubt, each Permitted L/C Reduction shall immediately reduce the L/C Availability upon occurrence, without the requirement for notice to or action by any party).
“L/C Collateral Reserve” means $14,000,000, representing the portion of the aggregate funded amount of the Debentures to be deposited into the Collateral Account on the Original Issue Date, to be either released to the Company or returned to the Holders in accordance with the conditions set forth in Section 3(d).
“L/C Confirmation” means (i) the Agent’s receipt of the original Letter of Credit, in form and substance reasonably satisfactory to the Agent, and (ii) Agent’s completion of an initial draw thereon (including a potential draw to satisfy the Company’s obligations with respect to the prepayment required under Section 3(f)).
“Letter of Credit” means an irrevocable standby letter of credit, for the benefit of the Agent, issued by HSBC Bank USA, N.A., in the initial aggregate face amount of $14,000,000, with an initial term expiring not earlier than the first anniversary of the date of issuance and automatically renewing for successive one-year periods unless the Issuer provides written notice of non-renewal to the Collateral Agent at least sixty (60) days prior to the then-current expiration date (or, if the Issuer will not issue an evergreen Letter of Credit, expiring on a fixed date not earlier than December 31, 2031). Any Letter of Credit issued in substitution for the Letter of Credit pursuant to the terms hereof shall be deemed to be the Letter of Credit upon delivery of such substitute Letter of Credit to the Agent.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge, security interest, lease, option, right of first refusal, easement, servitude, encroachment, restrictive covenant, restriction on transfer or other title defect, priority or other security or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, any international interest, prospective international interest, security assignment or other Registerable Interest, and the filing of any financing statement under the UCC or comparable law naming the owner of the asset to which such lien relates as debtor).
“Mandatory Default Amount” means the sum of (a) 110% of the outstanding principal amount of this Debenture (or, if Park Lane Investments LLC or its affiliates cure the applicable Event of Default within three Business Days of the occurrence of such Event of Default, 100% of the outstanding principal amount of this Debenture), plus 100% of accrued and unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture and the other Transaction Documents.
“New York Courts” shall have the meaning set forth in Section 9(d).
“Original Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debentures.
7
“Parent” means Surf Air Mobility Inc., a Delaware corporation and ultimate parent of the Company.
“Parts” shall mean all appliances, avionics, parts, instruments, appurtenances, accessories, furnishings and other equipment of whatever nature (other than a complete Engine or APU) that may from time to time be incorporated or installed in or attached to the Airframe, the Engines or the APU, and any and all such appliances, avionics, parts, instruments, appurtenances, accessories, furnishings and other equipment removed therefrom so long as the same have not been released from the Agent’s Lien pursuant to the applicable terms of this Debenture.
“Permitted L/C Reduction” means, on any date, a reduction in L/C Availability in the amount of the positive excess (if any) on such date of (i) the L/C Availability then in effect prior to such Permitted L/C Reduction over (ii) the aggregate principal amount outstanding with respect to all of the Debentures collectively. A Permitted L/C Reduction shall be deemed to occur on any date on which such a positive excess exists.
“Permitted Lien” means the individual and collective reference to the following: (a) Liens in favor of Holder or the Agent; (b) Liens deemed to be disclosed pursuant to the Purchase Agreement, as in effect as of the Original Issue Date, (c) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of business; provided, that the payment thereof is not yet required; provided, further, that with respect to any Aircraft, Airframe, Engine, APU or Part, Liens securing claims of mechanics and materialmen shall not exceed $250,000 in the aggregate for all Aircraft collectively, and which Liens shall not remain outstanding for more than thirty (30) days after completion of the underlying work; (d) Liens arising from judgments, decrees or attachments in circumstances which do not constitute an Event of Default hereunder; (e) statutory and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and brokerage firms; and (f) any other Lien not secured by the Collateral. Notwithstanding clauses (c) through (f) above, no Permitted Lien (other than Liens in favor of the Holder or the Agent under clause (a) and mechanics’ and materialmen’s liens permitted under clause (c), to the extent any such Lien attaches to the Collateral) shall apply to any Aircraft, Airframe, Engine, APU or Part.
“Permitted Operator” means the Company, or any other Person operating an Aircraft as a lessee under a Third Party Agreement between the Company and such Person, but only to the extent Agent provides its prior written consent to such Third Party Agreement, such consent not to be unreasonably delayed or withheld.
“Primary Hangar Location” means, with respect to each Aircraft, the location identified as such on Schedule 1 hereto.
“Purchase Agreement” means the Securities Purchase Agreement, dated as of June 30, 2026 among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.
8
“Records” shall mean any and all logs, manuals, certificates and data and inspection, modification, maintenance, engineering, technical, and overhaul records (whether in written or electronic form) with respect to an Airframe, the Engines, an APU, or any Parts, including, without limitation, all records (i) required to be maintained by the FAA or any other Governmental Authority having jurisdiction, or by any manufacturer or supplier with respect to the enforcement of warranties or otherwise, (ii) evidencing Company’s or the applicable Subsidiary’s compliance with Applicable Standards, or (iii) with respect to any maintenance service program.
“Registerable Interests” means all existing and prospective international interests and other interests, rights and/or notices, sales and prospective sales, assignments, subordinations and discharges, in each case, susceptible to being registered at the International Registry pursuant to the Cape Town Convention.
“Registration Certificate” means, with respect to each Aircraft, (i) a currently effective Certificate of Aircraft Registration (AC Form 8050-3), or (ii) any other certificate issued to Company or the applicable Subsidiary evidencing the currently effective registration of the Aircraft in its name, in connection with the operation of such Aircraft in the United States of America pursuant to the Registration Requirements; or (iii) any other document as may then be required to be maintained within such Aircraft by the Registration Requirements, either together with or in lieu of such certificate.
“Registration Requirements” means the requirements for registering aircraft with the Registry under 49 U.S.C. 44101-44104, and 14 C.F.R. § 47 as then in effect, any successor laws, rules or regulations pertaining to applicants for and holders of a Registration Certificate, the U.S. registration number for each Aircraft, and any such other FARs and other Applicable Laws, in each case as and to the extent pertaining to the registration of Company’s or the applicable Subsidiary’s ownership of each such Aircraft with the Registry, including any re-registration or renewal of such registration or replacement of any such Registration Certificate.
“Registry” means the FAA Civil Aviation Registry, Aircraft Registration Branch, or any successor registry having an essentially similar purpose pertinent to the ownership registration of the Aircraft pursuant to the Registration Requirements.
“Release Price” means, with respect to each Aircraft, the amount set forth opposite such Aircraft in the column titled “Release Price” on Schedule 1.
“Required Holders” means those Holders owning at least 50.1% of the outstanding principal balance of the Debentures; provided that, so long as any JGB Fund holds at least 20% of the outstanding principal balance of the Debentures, such JGB Fund shall be a “Required Holder”.
“Required Coverages” shall mean any of the insurance coverages required under this Debenture or any of the other Transaction Documents.
“Registration Rights Agreement” shall have the meaning assigned to such term in the Purchase Agreement.
9
“Resale Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Successor Entity” shall have the meaning set forth in Section 5.
“Transportation Code” shall mean Subtitle VII of Title 49 of the United States Code, as amended and recodified.
“Third Party Agreements” means any and all leases, subleases, interchange agreements, management agreements, charter agreements, pooling agreements, timeshare agreements, engine, airframe or aircraft maintenance programs and any other similar agreements or arrangements of any kind whatsoever relating to any Aircraft, Airframe or the Engines.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or any successors to any of the foregoing.
“TSA” means the Transportation Security Administration and/or the Administrator of the TSA, or any Person or Governmental Authority succeeding the functions of any of the foregoing.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or other applicable jurisdiction.
“Warrant Shares” shall have the meaning assigned to such term in the Purchase Agreement.
10
2 Pro rata portion of $600,000.00
3 Pro rata portion of $220,000.00
11
4 Pro rata portion of $100,000.00
12
13
14
15
16
17
18
19
20
21
22
23
24
25
*********************
(Signature Page Follows)
26
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above indicated.
SOUTHERN AIRWAYS PACIFIC, LLC
By:
Name:
Title:
SOUTHERN AIRWAYS EXPRESS, LLC
By:
Name:
Title:
[Holder Signature Page to Debenture]
AGREED AND ACCEPTED:
[HOLDER]
By:
Name:
Title:
[Collateral Agent Signature Page to Debenture]
AGREED AND ACCEPTED:
JGB COLLATERAL LLC
By:
Name:
Title:
SCHEDULE 1
Collateral Aircraft
The Aircraft for purposes of this Debenture are limited to the following aircraft:
# |
Description |
Release Price |
1 |
N825MA — Registered Owner: Southern Airways Pacific LLC; Aircraft: 2013 Cessna 208B, airframe serial no. 208B5065; Engine: None currently installed; Propeller: None currently installed; Primary Hangar/Location: Kalaeloa Airport (JRF), Hawaii; Airworthiness/Status: Unairworthy/grounded |
$400,000 |
2 |
N847MA — Registered Owner: Southern Airways Pacific LLC; Aircraft: 2013 Cessna 208B, airframe serial no. 208B5075; Engine: Pratt & Whitney Canada PT6A-140, engine serial no. PCE-VA0532; Propeller: McCauley HC-B3TN-3, propeller serial no. BUA33240; Primary Hangar/Location: HNL; Airworthiness/Status: Airworthy. (Which engine having at least 550 rated takeoff horsepower; and which propeller capable of absorbing at least 750 takeoff shaft horsepower.) |
$1,350,000 |
3 |
N504SA — Registered Owner: Southern Airways Express LLC; Aircraft: 2022 Construzioni Aeronautiche Tecnam P2012 Traveller, airframe serial no. 048/US; Engines: Lycoming TEO-540-C1A, engine serial nos. L-223-84A and L-224-84A; Propellers: MT Propeller MTV-14-B-C-F/CF195-30, propeller serial nos. 211046 and 211048; Primary Hangar/Location: EUL; Airworthiness/Status: Airworthy (Which engines having less than 550 rated takeoff horsepower; and which propellers are not capable of absorbing at least 750 takeoff shaft horsepower.) |
$1,400,000 |
4 |
N495SA — Registered Owner: Southern Airways Pacific LLC; Aircraft: 2026 Textron Aviation Inc. 208B, airframe serial no. 208B5942; Engine: Pratt & Whitney Canada PT6A-140, engine serial no. PCE-VA1136; Propeller: McCauley 4HFR34C778, propeller serial no. 241129; Avionics: Garmin G1000; Primary Hangar/Location: HNL; Airworthiness/Status: Airworthy/new June 2026 delivery. (Which engine having at least 550 rated takeoff horsepower; and which propeller capable of absorbing at least 750 takeoff shaft horsepower.) |
$3,150,000 |
5 |
N496SA — Registered Owner: Southern Airways Pacific LLC; Aircraft: 2026 Textron Aviaiton Inc. 208B, airframe serial no. 208B5943; Engine: Pratt & Whitney Canada PT6A-140, engine serial no. PCE-VA1137; |
$3,150,000 |
Schedule 1
|
Propeller: McCauley 4HFR34C778, propeller serial no. 260193; Avionics: Garmin G1000; Primary Hangar/Location: MEM; Airworthiness/Status: Airworthy/new June 2026 delivery. (Which engine having at least 550 rated takeoff horsepower; and which propeller capable of absorbing at least 750 takeoff shaft horsepower.) |
|
Schedule 1
Exhibit 10.6
THIS SECURITY AND ANY SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR (B) AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
SURF AIR MOBILITY INC.
Warrant Shares: [ ] |
Original Issuance Date: [ ], 2026 |
THIS WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “Warrant”) certifies that, for value received, [ ], or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time or times on or after the Original Issuance Date (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on the five year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Surf Air Mobility Inc., a Delaware corporation (the “Company”), up to [ ] shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of the Company (as subject to adjustment hereunder, the “Warrant Shares”). This Warrant is a Tranche A Warrant which represents the right to purchase the applicable Buyer’s pro rata portion of 710,294 aggregate Warrant Shares at an Exercise Price equal to 135% of the closing price of the Common Stock on the Trading Day immediately prior to the Closing.] [This Warrant is a Tranche B Warrant which represents the right to purchase the applicable Buyer’s pro rata portion of 617,647 aggregate Warrant Shares at an Exercise Price equal to 180% of the closing price of Common Stock on the Trading Day immediately prior to the Closing.] The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of June 29, 2026, among the Company, the Holder and the other Buyers party thereto.
2. Exercise.
(a) Exercise of Warrant. Subject to Section 2(c), exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within one (1) Trading Day following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has
1
Exhibit 10.6
purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise on the Trading Day of receipt of such notice if received before 4:30 PM (Eastern Time) or the following Trading Day if received thereafter. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant, shall be $[ ]1 per share, subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of Warrant Shares by the Holder, then this Warrant may be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (x) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (y) the highest Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) within two (2) hours of the time of the Holder’s delivery of the Notice of Exercise pursuant to Section 2(a) hereof if such Notice of Exercise is delivered during “regular trading hours,” or within two (2) hours after the close of “regular trading hours” on a Trading Day or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is delivered pursuant to Section 2(a) hereof after two (2) hours following the close of “regular trading hours” on such Trading Day;
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
1 Insert the applicable Exercise Price for the elected tranche, calculated as 135% (Tranche A) or 180% (Tranche B) of the closing price of the Common Stock.
2
Exhibit 10.6
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if the Common Stock is listed or quoted for trading on the OTC Market Group’s OTCQB exchange (“OTCQB”) or OTCQX exchange (“OTCQX”) (or any successors to either of the foregoing) , the VWAP of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of the Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Business Day” means any day other than a Saturday, a Sunday or any day on which commercial banks in The City of New York are authorized or required by law or executive order to close or be closed; provided, however, for clarification, commercial banks in The City of New York shall not be deemed to be authorized or required by law or executive order to close or be closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are open for use by customers on such day.
“Closing Sale Price” means, for any security as of any date, the last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price then the last trade price, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or on the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
“Eligible Exchange” means any of The New York Stock Exchange, The NYSE American LLC, The Nasdaq Capital Market, The Nasdaq Global Market or The Nasdaq Global Select Market (or any of their respective successors).
“Equity Conditions” will be deemed to be satisfied as of any date if all of the following conditions are satisfied as of such date and on each of the twenty (20) previous Trading Days: (A) the Holder is not in possession of any material non-public information; (B) the issuance of such shares will not be limited by Section 2(d)(viii), provided that if the only condition preventing a Forced Exercise is this clause (B), then the Company may effect a Forced Exercise up to the limit set forth in Section 2(d)(viii); (C) such shares will satisfy Section 5(e); (D) no pending, proposed or intended Fundamental Transaction has occurred that
3
Exhibit 10.6
has not been abandoned, terminated or consummated; (E) no delisting or suspension by the principal, in terms of volume, Eligible Exchange on which the Company is then listed or traded has been threatened (with a reasonable prospect of delisting or suspension occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or is reasonably likely to occur or pending as evidenced by (x) a writing by such Eligible Exchange or (y) the Company falling below the minimum listing maintenance requirements, if applicable, of such Eligible Exchange; and (F) the daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the New York Stock Exchange is not less than five million dollars ($5,000,000), provided, however, this clause (G) shall be deemed to be satisfied if such condition is met for at least eighteen (18) out of the twenty (20) previous Trading Days.
“Forced Exercise Trigger” means the Closing Sale Price exceeds one hundred fifty percent (150%) of the Exercise Price on the date hereof (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization, but excluding any adjustments pursuant to the provisions of Section 3(g) of this Warrant) on each of twenty (20) consecutive Trading Days beginning after the Original Issuance Date and ending on the date upon which the Forced Exercise Notice is delivered to the Holder.
“Freely Tradable” means, with respect to any shares of Common Stock issued or issuable pursuant to this Warrant, that such shares are (or when issued, will be) issued by the Company (i) pursuant to an effective registration statement not subject to any “stop order” by the Commission (as defined below) or (ii) pursuant to Section 3(a)(9) of the Securities Act, and, in each case, issued without any restrictive legend or stop‑transfer instructions on transfer.
“Principal Market” means The New York Stock Exchange.
“Trading Market” means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Stock Market LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if the Common Stock is listed or quoted for trading on OTCQB or OTCQX (or any successors to either of the foregoing), the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
(d) Mechanics of Exercise
(i) Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company (“DTC”) through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and the Warrant Shares are Freely
4
Exhibit 10.6
Tradable, and otherwise by physical delivery of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by one (1) Trading Day after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon the date of delivery of the Notice of Exercise (the “Exercise Date”, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within one (1) Trading Day following delivery of the Notice of Exercise; and provided further, that the Holder shall be deemed to have waived any voting rights of any such Warrant Shares that may arise during the period commencing on such Exercise Date, through, and including, such applicable Warrant Share Delivery Date, as necessary, such that the aggregate voting rights of any Common Stock (including such Warrant Shares) beneficially owned by the Holder and/or any Attribution Parties, collectively, shall not exceed the Beneficial Ownership Limitation (as defined below) as a result of any such exercise of this Warrant. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a registrar (which may be the Company’s transfer agent (the “Transfer Agent”)) that is a participant in the Fast Automated Securities Transfer Program (“FAST”) so long as this Warrant remains outstanding and exercisable.
(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
(iii) Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv) Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action by the Holder with respect to such delivery of Warrant Shares), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases shares of Common Stock having a total
5
Exhibit 10.6
purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
(v) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either (x) pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or (y) round up to the next whole share of Common Stock.
(vi) Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii) Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
(viii) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other securities of the Company or its Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (collectively “Common Stock Equivalents”)) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(d)(viii), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
6
Exhibit 10.6
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(d)(viii) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be the responsibility of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s representation to the Company that this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company may, but shall have no obligation to, verify or confirm the accuracy of such representation. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section 2(d)(viii), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock outstanding at the close of business on the prior Business Day. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant Shares issuable upon exercise of this Warrant. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d)(viii) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing to the Holder.
(e) Forced Exercise. If the Forced Exercise Trigger occurs, then the Company may, at its sole discretion, deliver written notice to the Holder (a “Forced Exercise Notice”) requiring the Holder to exercise all or any portion of this Warrant (a “Forced Exercise”) (i) for cash, if at the time the Forced Exercise Notice is delivered there is an effective registration statement registering, and the prospectus contained therein is available for, the resale of the Warrant Shares, or (ii) otherwise, by cashless exercise pursuant to Section 2(c), and certifying that the Equity Conditions have been satisfied on the date the Forced Exercise Notice was delivered to the Holder; provided that (x) no Forced Exercise will be effected unless the Equity Conditions are satisfied on each Trading Day from the date of the Forced Exercise Notice until the corresponding Warrant Shares are delivered by the Company, (y) if the Company receives a Notice of Exercise prior to the date the Company delivers a Forced Exercise Notice and any Warrant Shares due thereunder remain undelivered by the Company, the Forced Exercise may not occur until after such Warrant Shares are delivered to the Holder and (z) the number of Warrant Shares subject to any Forced Exercise shall be reduced, on a share-for-share basis, by the number of Warrant Shares that the Holder exercised pursuant to any voluntary Notices of Exercise delivered prior to the Forced Exercise Date. The Forced Exercise shall be effective as of the date the Forced Exercise Notice is delivered to the Holder (the “Forced Exercise Date”), and the Company shall deliver the applicable Warrant Shares as if the Holder had delivered
7
Exhibit 10.6
a Notice of Exercise on the Forced Exercise Date using the applicable settlement method. The Company may not deliver more than one Forced Exercise Notice in any rolling ten (10) Trading Day period.
3. Certain Adjustments.
(a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on shares of Common Stock or any other equity or Common Stock Equivalents payable in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
(b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s
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Exhibit 10.6
right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant and delivered (in proportionate part in the case of a partial exercise) together with the applicable Warrant Shares if and when the Warrant is exercised.
(d) Fundamental Transaction. If (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of shares of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(d)(viii) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(d)(viii) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the
9
Exhibit 10.6
exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless of whether (i) the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares; and/or (ii) a Fundamental Transaction occurs prior to the Initial Exercise Date.
(e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(f) Notice to Holder.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
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Exhibit 10.6
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
(g) Voluntary Adjustment By Company. At any time, subject to the rules and regulations of the Trading Market and applicable law, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
4. Transfer of Warrant.
(a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
(d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) without volume or manner-of-sale restrictions or current public information requirements permitted pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provide to the Company an opinion of counsel
11
Exhibit 10.6
reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of this Warrant under the Securities Act; provided, however, that no such opinion shall be required in connection with any transfer of this Warrant or the Warrant Shares (A) to an Affiliate of the Holder, (B) to a successor fund or entity under common management with the Holder, or (C) by operation of law, so long as, in each case, the transferee agrees in writing to be bound by the terms hereof and of the Securities Purchase Agreement.
(e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that (i) it is an “accredited investor” as defined in Regulation D promulgated under the Securities Act and (ii) it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
5. Miscellaneous.
(a) Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published in the Wall Street Journal (New York edition) on the relevant date of calculation.
(b) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
(c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
(d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
(e) Authorized Shares. The Company covenants that during the period that the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued and delivered, as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares underlying this Warrant
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Exhibit 10.6
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
(f) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Securities Purchase Agreement. For the avoidance of doubt, this Warrant shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles.
(g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not Freely Tradable, will have restrictions upon resale imposed by state, federal or foreign securities laws.
(h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Securities Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(i) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Securities Purchase Agreement.
(j) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any shares
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Exhibit 10.6
of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
(k) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
(l) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
(m) Amendment. Other than Section 2(d)(viii) and this Section 5(m), which may not be modified, amended or waived, this Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(n) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
(o) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
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(Signature Page Follows)
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Exhibit 10.6
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
SURF AIR MOBILITY INC.
By: _____________________________
Name:
Title:
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Exhibit 10.6
EXHIBIT A
NOTICE OF EXERCISE
TO: SURF AIR MOBILITY INC.
(1) The undersigned hereby elects to purchase _______ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. In exercising the Warrant, the undersigned hereby confirms and acknowledges that the representations set forth in the Warrant as they apply to the undersigned are true and complete as of this date.
(2) Payment shall take the form of (check applicable box(es)):
☐ in lawful money of the United States; and/
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
Box A ☐ The Warrant Shares are to be issued in unrestricted form and shall be delivered to the following DWAC Account Number. The undersigned hereby certifies that such shares are being resold pursuant to an effective registration statement or such shares are being issued pursuant to the cashless exercise procedure set forth in subsection 2(c) and resold pursuant to Rule 144.
_______________________________
_______________________________
Box B ☐ The Warrant Shares are to be issued in restricted form and shall be delivered physically, registered in the Company’s share register in the name of the undersigned or its designee specified below
_______________________________
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
_____________________________________________________________________________________
Title of Authorized Signatory:
_____________________________________________________________________________________
Date:
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Exhibit 10.6
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: _____________________________________________________________________________
(Please Print)
Address: ___________________________________________________________________________
(Please Print)
Phone Number: _____________________________________________________________________
Email Address: _____________________________________________________________________
Dated: ____________________________________________________________________________
Holder’s Signature: __________________________________________________________________
Holder’s Address: ___________________________________________________________________
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Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 30, 2026, by and among Surf Air Mobility Inc., a Delaware corporation (the “Company”), and each buyer identified as a “Buyer” under the Purchase Agreement (each, a “Buyer” and, collectively, the “Buyers”).
This Agreement is made pursuant to the Securities Purchase Agreement, dated as of June 30, 2026, by and among the Company, the Buyers and JGB Collateral LLC, as Collateral Agent (as amended, the “Purchase Agreement”).
The Company and each Buyer hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Advice” shall have the meaning set forth in Section 6(c).
“Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 75th calendar day following the date hereof (or, in the event of a review by the Commission, the 90th calendar day following the date hereof) and with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the 30th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a review by the Commission, the 45th calendar day following the date such additional Registration Statement is required to be filed hereunder); provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the tenth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.
“Effectiveness Period” shall have the meaning set forth in Section 2(a).
“Event” shall have the meaning set forth in Section 2(d).
“Event Date” shall have the meaning set forth in Section 2(d).
“Filing Date” means, with respect to the Initial Registration Statement required hereunder, the 45th calendar day following the date hereof and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.
“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified Party” shall have the meaning set forth in Section 5(c).
“Indemnifying Party” shall have the meaning set forth in Section 5(c).
“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Losses” shall have the meaning set forth in Section 5(a).
“Plan of Distribution” shall have the meaning set forth in Section 2(a).
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“Registrable Securities” means, as of any date of determination, (a) all Warrant Shares issued and issuable upon exercise of the Warrants (assuming on such date that the Warrants are exercised in full without regard to any exercise limitations therein) and (b) any shares of Common Stock issued or issuable with respect to the Warrant Shares by reason of any stock split, stock dividend, recapitalization, exchange or similar event; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public
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information pursuant to Rule 144 as set forth in a written opinion letter of counsel to the Company to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issued or issuable with respect thereto as a dividend or as a result of any stock split, recapitalization, exchange or similar event were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the written advice of outside counsel to the Company.
“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).
“SEC Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.
“Tranche A Warrants” means the Common Stock purchase warrants issued to the Buyers pursuant to the Purchase Agreement to purchase up to an aggregate of 710,294 shares of Common Stock at an initial exercise price equal to 135% of the closing price of the Common Stock on the Trading Day immediately prior to the Closing Date, subject to adjustment as provided therein.
“Tranche A Warrant Shares” means the shares of Common Stock issued and issuable upon exercise of the Tranche A Warrants.
“Tranche B Warrants” means the Common Stock purchase warrants issued to the Buyers pursuant to the Purchase Agreement to purchase up to an aggregate of 617,647 shares of Common Stock at an initial exercise price equal to 180% of
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the closing price of the Common Stock on the Trading Day immediately prior to the Closing Date, subject to adjustment as provided therein.
“Tranche B Warrant Shares” means the shares of Common Stock issued and issuable upon exercise of the Tranche B Warrants.
“Warrant Shares” means, collectively, the Tranche A Warrant Shares and the Tranche B Warrant Shares.
“Warrants” means, collectively, the Tranche A Warrants and the Tranche B Warrants.
2. Registration Rights.
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In the event of a cutback hereunder, the Company shall give the Holder at least three (3) Trading Days prior written notice along with the calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of
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securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.
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3. Registration Procedures.
In connection with the Company’s registration obligations hereunder, the Company shall:
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4. Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the
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listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.
5. Indemnification.
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An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party, provided that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.
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The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
6. Miscellaneous.
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(Signature Pages Follow)
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Exhibit 10.7
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
SURF AIR MOBILITY INC.
By:
Name:
Title:
[SIGNATURE PAGE OF BUYERS FOLLOWS]
Exhibit 10.7
[SIGNATURE PAGE OF BUYERS TO SURF AIR MOBILITY INC. RRA]
Name of Buyer: JGB Partners L.P.
JGB Capital Offshore L.P.
JGB Capital L.P.
Signature of Authorized Signatory of Buyer: __________________________
Name of Authorized Signatory: Brett Cohen
Title of Authorized Signatory: President of each above-referenced Buyer
[SIGNATURE PAGES CONTINUE]
Exhibit 10.7
Annex A
Plan of Distribution
Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:
The Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.
Broker‑dealers engaged by the Selling Stockholders may arrange for other brokers‑dealers to participate in sales. Broker‑dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker‑dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set
forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.
The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the
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Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
On June 30, 2026, we issued to the selling stockholders, pursuant to the Securities Purchase Agreement, (i) Tranche A Warrants to purchase up to an aggregate of 710,294 shares of our common stock at an exercise price equal to $1.2555 per share and (ii) Tranche B Warrants to purchase up to an aggregate of 617,647 shares of our common stock at an exercise price equal to $1.6740 per share, in each case subject to adjustment as provided in the applicable warrant and with a termination date of June 30, 2031.
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Annex B
SELLING STOCKHOLDERS
The shares of common stock being offered by the selling stockholders are the Warrant Shares issuable to the selling stockholders upon exercise of the Tranche A Warrants and the Tranche B Warrants. For additional information regarding the issuance of the Warrants, see “Private Placement of Warrants” above. We are registering the shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of the Warrants and the Warrant Shares, the selling stockholders have not had any material relationship with us within the past three years.
The table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock by each selling stockholder. The second column lists the number of shares of common stock beneficially owned by each selling stockholder, based on its ownership of the Tranche A Warrants, the Tranche B Warrants and the Warrant Shares, as of ________, 2026, assuming exercise of the Warrants held by the selling stockholders on that date, without regard to any limitations on exercise.
The third column lists the shares of common stock being offered by this prospectus by the selling stockholders.
In accordance with the terms of the Registration Rights Agreement with the selling stockholders, this prospectus generally covers the resale of the maximum number of Warrant Shares issuable upon exercise of the Tranche A Warrants and Tranche B Warrants, determined as if the outstanding Warrants were exercised in full as of the Trading Day immediately preceding the date this registration statement was initially filed with the SEC and as of the Trading Day immediately preceding the applicable date of determination, subject to adjustment as provided in the Registration Rights Agreement, without regard to any limitations on exercise of the Warrants. The fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.
Under the terms of the Warrants, a selling stockholder may not exercise the Warrants to the extent such exercise would cause such selling stockholder, together with its affiliates and Attribution Parties, to beneficially own a number of shares of common stock which would exceed 4.99% of our then outstanding common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exercise of such Warrants which have not been exercised. The number of shares in the second and fourth columns do not reflect this limitation. The selling stockholders may sell all, some or none of their shares in this offering. See "Plan of Distribution."
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Name of Selling Stockholder |
Number of Shares of Common Stock Owned Prior to Offering (Including Warrant Shares Issuable Upon Exercise of Tranche A Warrants and Tranche B Warrants) |
Maximum Number of Warrant Shares to be Sold Pursuant to this Prospectus |
Number of Shares of Common Stock Owned After Offering |
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Annex C
Surf Air Mobility Inc.
Selling Stockholder Notice and Questionnaire
The undersigned beneficial owner of shares of common stock issuable upon exercise of the Tranche A Warrants and/or Tranche B Warrants (the “Registrable Securities”) of Surf Air Mobility Inc., a Delaware corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.
DOCPROPERTY DOCXDOCID DMS=NetDocuments Format=<<ID>>, v.<<VER>> \* MERGEFORMAT 4898-0496-4023, v.2
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
(a) Full Legal Name of Selling Stockholder
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(b) Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:
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(c) Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):
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2. Address for Notices to Selling Stockholder:
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Telephone: |
E-Mail: |
Contact Person: |
3. Broker-Dealer Status:
(a) Are you a broker-dealer?
Yes No
(b) If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
Yes No
Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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(c) Are you an affiliate of a broker-dealer?
Yes No
(d) If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
Yes No
Note: If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
4. Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Tranche A Warrants, Tranche B Warrants and Warrant Shares.
(a) Type and Amount of other securities beneficially owned by the Selling Stockholder:
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5. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:
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The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Date:
Beneficial Owner:
By:
Name:
Title:
PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:
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Exhibit 10.8
SECOND AMENDMENT TO REIMBURSEMENT AGREEMENT
SECOND Amendment (this “Amendment”) dated as of June 30, 2026 (the “Second Amendment Effective Date”), to that certain Reimbursement Agreement, dated as of November 14, 2024 (as amended by that certain First Amendment to Reimbursement Agreement, dated as of November 12, 2025, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Original Reimbursement Agreement”, and the Original Reimbursement Agreement, as amended by this Amendment, the “Amended Reimbursement Agreement”), by and among, inter alios, Surf Air Mobility Inc., a Delaware corporation (the “Company”), the other Obligors party thereto from time to time and Park Lane Investments LLC, as procurer of certain credit support for the benefit of the Company (with its successors, the “Credit Provider”), by and among the Company, the Credit Provider and the other Obligors party hereto. Capitalized terms used but not defined herein are used as defined in the Amended Reimbursement Agreement.
RECITALS:
WHEREAS, on or about the Second Amendment Effective Date, the Company and High Trail Special Situations LLC are entering into that certain Omnibus Amendment and Exchange Agreement, pursuant to which the existing Senior Secured Convertible Note due 2028 will be exchanged for (i) a Senior Secured Convertible Note due 2027 in the initial principal amount of $16,857,142.89 and (ii) a Senior Secured Term Note due 2028 in the initial principal amount of $30,000,000 (collectively, the “High Trail Senior Notes”);
WHEREAS, on or about the Second Amendment Effective Date, JGB Collateral LLC, as collateral agent, and the purchasers party thereto are providing debenture financing to Southern Airways Pacific, LLC and Southern Airways Express, LLC, and the Credit Provider has agreed to procure a standby letter of credit issued by HSBC Bank USA, N.A. in favor of JGB Collateral LLC in support thereof;
WHEREAS, in connection with the foregoing, the Credit Provider has agreed to release its Liens on the JGB Aircraft to permit the holders of the JGB Debentures to take a first-priority Lien thereon, and the Company has agreed to grant the Credit Provider a negative pledge in respect of the Company’s other aircraft; and
WHEREAS, the Company has requested, and the Credit Provider is willing to make, certain amendments to the provisions of the Original Reimbursement Agreement, as further set forth in the Amended Reimbursement Agreement.
NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. Certain Amendments.
(a) Upon the Second Amendment Effective Date, the Original Reimbursement Agreement (excluding all schedules and exhibits, which shall remain in the form most recently delivered) is hereby amended to delete the red or green stricken text (indicated textually in the same manner as the following examples: stricken text and stricken text) and to add the blue or green double-underlined text (indicated textually in the same manner as the following examples: double-underlined text and double-underlined text), as set forth in the marked copy of the Amended Reimbursement Agreement attached as Annex I hereto.
Section 2. Conditions to Effectiveness of Amendment. This Amendment shall become effective as of the Second Amendment Effective Date when:
(a) this Amendment shall have been executed and delivered by the Company, the other Obligors, and the Credit Provider;
6001228188v3
(b) a certificate relating to each Obligor, dated as of the Second Amendment Effective Date, which shall (A) certify the resolutions of its board of directors, members or other body authorizing the execution, delivery and performance of this Amendment, (B) identify by name and title and bear the signatures of the officers of such Obligor (or other authorized signatory) authorized to sign this Amendment, (C) contain appropriate attachments, including the Organizational Documents of each Obligor certified, if applicable, by the relevant authority of the jurisdiction of organization of such Obligor, and (D) attach a good standing certificate (to the extent such concept exists) for each Obligor from its jurisdiction of organization;
(c) a written opinion (addressed to the Credit Provider and dated as of the Second Amendment Effective Date) of Sullivan & Worcester LLP, counsel to the Obligors as to such matters with respect to this Amendment and the Reimbursement Documents and in form and substance reasonably satisfactory to the Credit Provider. The Company hereby requests such counsel to deliver such opinion;
(d) to the extent invoiced prior to the Second Amendment Effective Date, all reasonable, documented out-of-pocket expenses and all invoiced fees and expenses of counsel to the Credit Provider shall have been paid or reimbursed, on or prior to the Second Amendment Effective Date; and
(e) each of the representations and warranties made by the Company and each of the other Obligors contained in Article III of the Amended Reimbursement Agreement and in each other Reimbursement Document shall be true and correct in all material respects on and as of the Second Amendment Effective Date with the same effect as though made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; provided that, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or by a reference to a Material Adverse Effect in the text thereof; provided further that all references in the representations set forth in Article III of the Original Reimbursement Agreement to “Reimbursement Documents” shall be deemed to be references to this Amendment and the other Reimbursement Documents (including the Original Reimbursement Agreement) as amended by this Amendment.
Section 3. Representations and Warranties. By its execution of this Amendment, each Obligor hereby represents and warrants that:
(a) this Amendment has been duly executed and delivered by such Obligor and constitutes a legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally or by general equitable principles relating to enforceability;
(b) the execution, delivery and performance of this Amendment and the other documents executed in connection herewith (i) have been duly authorized by all requisite corporate or other organizational and, if required, stockholder or member action of such Obligor and (ii) will not (x) violate any provision of (1) any requirement of law which would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect or (2) the certificate or articles of incorporation, bylaws or other constitutive documents of such Obligor, (y) conflict with or result in any breach or contravention of any document evidencing any contractual obligation to which such Obligor is a party or any order, injunction, writ or decree of any Governmental Authority to which such Obligor or its property is subject which would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect or (z) result in the creation of any Lien;
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6001228188v3
(c) each of the representations and warranties made by such Obligor contained in Article III of the Amended Reimbursement Agreement and each other Reimbursement Document to which such Obligor is party are true and correct in all material respects on and as of the Second Amendment Effective Date with the same effect as though made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; provided that, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or by a reference to a Material Adverse Effect in the text thereof; provided further that all references in the representations set forth in Article III of the Original Reimbursement Agreement to “Reimbursement Documents” shall be deemed to be references to this Amendment and the other Reimbursement Documents (including the Original Reimbursement Agreement) as amended by this Amendment; and
(d) no Default or Event of Default has occurred and is continuing.
Section 4. Certain Acknowledgements.
(a) Each Obligor hereby expressly acknowledges and consents to the terms of this Amendment and reaffirms, as of the date hereof, the covenants and agreements contained in each Reimbursement Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Amendment and the transactions contemplated hereby.
(b) After giving effect to this Amendment, and except in respect of the Credit Provider’s Liens on the JGB Aircraft (which are being released as of the Second Amendment Effective Date), neither the modification of the Original Reimbursement Agreement effected pursuant to this Amendment nor the execution, delivery, performance or effectiveness of this Amendment:
(i) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Reimbursement Document; it being understood that such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or
(ii) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.
(c) Each Obligor hereby (i) acknowledges and agrees that the Security Agreement and each of the other Reimbursement Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall not be impaired or limited by the execution or effectiveness of this Amendment and (ii) acknowledges and agrees that it will continue to guarantee, to the fullest extent possible in accordance with the Reimbursement Documents, the payment and performance of all Obligations under each of the Reimbursement Documents to which it is a party (including all such Obligations as amended, reaffirmed and/or increased pursuant to this Amendment).
(d) Each Obligor hereby (i) confirms that the Security Agreement and all Collateral encumbered thereby (other than the Credit Provider’s Liens on the JGB Aircraft, which are being released as of the Second Amendment Effective Date) will continue to secure, to the fullest extent possible in accordance with the Security Agreement, the payment and performance of the Obligations (including all such Obligations as amended, reaffirmed and/or increased pursuant to this Amendment), including without limitation the payment and performance of all such applicable Obligations that are joint and several obligations of each Obligor now or hereafter existing, in each case pursuant to the terms of the Security Agreement and (ii) confirms its respective pledges, grants of security interests and other obligations, as applicable, under and subject to the terms of the Security Agreement.
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Section 5. Amendment, Modifications and Waiver. This Amendment may not be amended, modified or waived except in accordance with Section 7.1 of the Original Reimbursement Agreement.
Section 6. Miscellaneous.
(a) Entire Agreement. This Amendment, the Amended Reimbursement Agreement and the other Reimbursement Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties hereto with respect to the subject matter hereof. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Amended Reimbursement Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Amended Reimbursement Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. It is understood and agreed that each reference in each Reimbursement Document to the Amended Reimbursement Agreement, whether direct or indirect, shall hereafter be deemed to be a reference to the Amended Reimbursement Agreement as amended hereby and that this Amendment is a Reimbursement Document.
(b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
(c) Severability. If any provision of this Amendment is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
(d) Counterparts. This Amendment may be executed in one or more counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which together shall constitute a single contract. Delivery by facsimile or electronic transmission of an executed counterpart of a signature page to this Amendment shall be effective as delivery of an original executed counterpart of this Amendment. The words “execution,” “execute,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. The provisions of Section 7.7 of the Original Reimbursement Agreement are hereby incorporated by reference.
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(e) Ratification. This Amendment is limited to the matters specified herein and shall not constitute acceptance or waiver, or, to the extent not expressly set forth herein, an amendment or modification, of any other provision of the Original Reimbursement Agreement or any other Reimbursement Document. Nothing herein contained is intended to constitute a substitution or novation of the obligations outstanding under the Original Reimbursement Agreement or any other Reimbursement Document or instruments securing the same, which shall remain in full force and effect as modified hereby or by instruments executed concurrently herewith, and each of the parties hereto acknowledges and agrees that the terms of this Amendment constitute an amendment of the terms of pre-existing indebtedness and the related agreement, as evidenced by the Amended Reimbursement Agreement.
[Signature pages to follow]
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6001228188v3
IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Amendment as of the date first written above.
COMPANY:
SURF AIR MOBILITY INC.
By: ________________________________
Name: Deanna White
Title: Chief Executive Officer
OTHER OBLIGORS:1
SOUTHERN AIRWAYS CORPORATION
By: ________________________________
Name: Deanna White
Title: Chief Executive Officer
SOUTHERN AIRWAYS PACIFIC, LLC
By: ________________________________
Name: Deanna White
Title: Chief Executive Officer
SOUTHERN AIRWAYS AUTOS, LLC
By: ________________________________
Name: Deanna White
Title: Chief Executive Officer
SOUTHERN AIRWAYS EXPRESS, LLC
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
N803F, INC.
1 NTD: please confirm scope of obligors.
[Signature Page to Second Amendment]
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
PAYMENTS OS INC.
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
SURF AIR TECHNOLOGIES INC.
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
SURF AIR GLOBAL LIMITED
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
MULTI-AERO, INC.
By: ________________________________
Name: Deanna White
Title: Chief Executive Officer
N107KA, INC.
By ________________________________
Name: Deanna White
Title: Chief Executive Officer
N208EE, INC.
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
SURFAIR HOLDINGS US, INC.
[Signature Page to Second Amendment]
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
SURF AIR SUB 1, INC.
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
SURF ON DEMAND INC.
By:________________________________
Name: Deanna White
Title: Chief Executive Officer
[Signature Page to Second Amendment]
PARK LANE INVESTMENTS LLC,
as the Credit Provider
By:
Name:
Title:
[Signature Page to Second Amendment]
ANNEX I
Amended Reimbursement Agreement
[See attached.]
6001228188.3
ANNEX II
Schedule 5.2(b)
[See attached.]
6001228188.3
Schedule 5.2(b)
None.
6001228188.3
Exhibit 99.1
Surf Air Mobility Announces Debt Financing Transactions to Strengthen Balance Sheet and Reduce Future Shareholder Dilution
New non-convertible $21.6 million asset-backed loan will provide incremental working capital.
Remaining $47 million senior secured convertible note will be exchanged for two new instruments.
New $17 million convertible note will reduce monthly payments by up to 50%.
New $30 million non-convertible term note will be non-amortizing and non-interest bearing until January 2027.
Transactions are structured to significantly increase balance sheet liquidity while meaningfully reducing shareholder dilution.
LOS ANGELES — July 1, 2026 — Surf Air Mobility Inc. (NYSE: SRFM) (“Surf Air Mobility” or the “Company”) today announced two debt financing transactions designed to strengthen its balance sheet and reduce future shareholder dilution. Surf Air Mobility has entered into a definitive agreement to refinance its existing senior secured convertible note, which is expected to reduce the remaining principal – reduced from the original principal amount of $74 million to $47 million – by an additional 64% and monthly payments by up to 50%. Separately, certain subsidiaries of Surf Air Mobility have received the first disbursement of a new non-convertible $21.6 million asset-backed loan secured by new and existing aircraft. Together, the transactions are expected to significantly lower the Company’s near-term cash obligations, extend debt maturities and improve balance sheet liquidity.
Oliver Reeves, Chief Financial Officer of Surf Air Mobility, said: “With these two important transactions, we are positioning ourselves to shift the majority of our convertible debt to term debt to minimize shareholder dilution. Upon completion, we expect significantly lower amortization, less dilution, and far greater flexibility around our liquidity going forward.”
Over the last week, Surf Air Mobility announced the achievement of several key milestones, including its first enterprise software customer contract with Wheels Up, the expansion of its
Exhibit 99.1
partnership with Palantir to accelerate the commercialization of SurfOS, and the demonstration of electric flight in Hawaii with BETA Technologies.
Deanna White, Chief Executive Officer of Surf Air Mobility, said: “Stability in our capital structure will allow us to focus on both continuing to improve our operations and the commercialization of SurfOS. Our recent business development announcements with Palantir, Wheels Up, and BETA Technologies all represent momentum across our core objectives, and we look forward to communicating additional commercial milestones throughout the remainder of 2026.”
Convertible Refinancing
Surf Air Mobility has entered into a definitive agreement to refinance its existing senior secured convertible note due 2028, with a currently outstanding principal amount of approximately $46.9 million, into a new $16.9 million senior secured convertible note due 2027 and a new non-convertible $30 million senior secured term note due 2028. The new notes will be senior secured obligations of the Company, guaranteed by certain of the Company’s subsidiaries. Surf Air Mobility anticipates closing on the senior secured convertible note due 2027 and the new non-convertible $30 million senior secured term note due 2028, on or about July 1, 2026, subject to certain closing conditions.
Upon completion, the new structure will reduce the existing convertible note principal by 64% and lowers monthly amortization payments from up to $4 million to up to $2 million, a reduction of up to 50%. The Company may make these payments in cash or stock, subject to certain conditions, providing additional flexibility to manage liquidity.
Asset-Backed Loan
Certain subsidiaries of Surf Air Mobility have also entered into a new non-convertible $21.6 million asset-backed loan, secured by new and existing aircraft. The loan, which significantly increases balance sheet liquidity, will fund in two tranches. The first disbursement occurred on June 30, 2026, and a second disbursement of $14 million is expected to occur within 30 days, subject to certain conditions, which will include a guaranty by Surf Air Mobility.
Notice Regarding the Securities
The offer and sale of the foregoing securities are being or will be made in reliance on an exemption from the registration requirement under Section 4(a)(2) of the Securities Act of 1933, as amended
Exhibit 99.1
(the "Securities Act"), or Regulation D promulgated thereunder, Section 3(a)(9) of the Securities Act and/or applicable state securities laws, and the securities have not been and will not initially be registered under the Securities Act, or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. Pursuant to the terms of the securities purchase agreement entered into with the lenders in the asset-based loan transaction, the Company has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the "SEC") covering the resale of certain shares of common stock underlying warrants being issued to each of such lenders.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities being offered, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Surf Air Mobility
Surf Air Mobility is a Los Angeles-based air mobility platform. With its AI-enabled SurfOS software, Surf Air Mobility provides technology designed to support the modernization of air operations and the adoption of next-generation aircraft. The Company currently operates one of the largest commuter airlines in the United States by scheduled departures and provides private charter services. Together, these businesses provide the operational scale and real-world operating data to validate and deploy its software. These capabilities position Surf Air Mobility as a leader shaping a more efficient, connected, and accessible future for aviation.
Forward-Looking Statements
This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s profitability and future financial results and its ability to achieve its business objectives. Readers of this release should be aware of the speculative nature of forward-looking statements. For example, the Company is using forward-looking statements when it discusses the anticipated completion of the convertible note refinancing, which remains subject to closing conditions and may not be completed on the terms described or at all; the expectation that, upon completion of the transactions, the Company will have significantly lower amortization, less dilution, and far
Exhibit 99.1
greater flexibility around its liquidity going forward; the expected use of proceeds; and the potential for a second disbursement under the asset-backed loan. These statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company and reflect the Company’s current views concerning future events. As such, they are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among many others: the Company’s ability to satisfy the closing conditions to, and complete, the convertible note refinancing on the terms described herein or at all; the Company’s ability to anticipate the future needs of the air mobility market; the Company’s future ability to pay contractual obligations and liquidity, which will depend on operating performance, cash flow and ability to secure adequate financing; the dependence on third-party partners and suppliers for the components and collaboration in the Company’s development of its advanced air mobility software platform, and any interruptions, disagreements or delays with those partners and suppliers; the inability to execute business objectives and growth strategies successfully or sustain the Company’s growth; the inability of the Company’s customers to pay for the Company’s services; the inability of the Company to obtain additional financing or access the capital markets to fund its ongoing operations on acceptable terms and conditions; the outcome of any legal proceedings that might be instituted against the Company, the risks associated with the Company’s obligations to comply with applicable laws, government regulations and rules and standards of the New York Stock Exchange; and general economic conditions. These and other risks are discussed in detail in the periodic reports that the Company files with the SEC, and investors are urged to review those periodic reports and the Company’s other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, before making an investment decision. the Company assumes no obligation to update its forward-looking statements except as required by law.
Contacts
Surf Air Mobility Media Contacts
Press: [email protected]
Investors: [email protected]